Viet Son Net

NetEase (Nasdaq:NTES) recorded net income of RMB 452.26 million the first quarter of 2010, down from RMB 571.77 million in the prior quarter and up against RMB 416.72 million in the first quarter of 2009, the company reported May 19. Diluted earnings per American depository share (ADS) came to RMB 3.47. During the period, NetEase recognized revenues of RMB 1.19 billion, compared with RMB 1.29 billion and RMB 781.7 million in the preceding and year-ago quarters, respectively. Of the total, the company’s online games business generated RMB 1.085 billion in the quarter, compared with RMB1.089 billion in the previous quarter and RMB 724.02 million in the first quarter of 2009, while advertising revenues halved to RMB 91.55 million from RMB 183.68 million in the previous quarter but having doubled compared against RMB 41.03 million in the first three months of 2009. The company reported a foreign exchange loss of RMB 39.5 million in the quarter.

NetEase said it plans to launch an expansion of its 2.5D martial arts MMORPG Heroes of Tang Dynasty in the fourth quarter of 2010, as well as expansions for Westward Journey II and III in the third quarter. The company said its application to release the second expansion of World of Warcraft, “Wrath of the Lich King” (WLK) is still under regulatory review.

NetEase (Nasdaq:NTES) and Shanghai Mantangtang Communications have a RMB 12 million agreement to produce a 52-episode animation based on its in-house developed Q-style MMORPG Fantasy Westward Journey, 21st Century Business Herald reported May 10 quoting Mantangtang Executive Director Liu Hui. The animation is expected to be released nationwide in 2011, said the report.

NetEase had published comic books based on the game three years ago in cooperation with Mantangtang and has sold 300,000 copies to date, Liu said in the report.

NetEase (Nasdaq:NTES) plans to open registration for its social networking service (SNS) product Dream Life (“Menghuan Rensheng”) at dream.163.com on April 28, 163.com reported April 26.

The SNS site entered open beta testing in January.

NetEase (Nasdaq:NTES) has denied recent industry rumors that Wrath of the Lich King (“WLK”), the second expansion of its licensed 3D MMORPG World of Warcraft, has been rejected by the General Administration of Press and Publication of China (GAPP), duowan.com reported April 20 citing a company public relations officer.

NetEase has submitted the game for review and received no negative feedback from the GAPP to date, company PR said, according to the report.

The GAPP said in March that its Shanghai branch was reviewing “WLK” but did not disclose any timeline for its approval.

NetEase (Nasdaq:NTES) may take over 50% stake in MSN China company Shanghai MSN Network Communications Technology, a joint venture between Shanghai Alliance Investment Ltd (“SAIL”) and Microsoft (Nasdaq:MSFT), from SAIL, Sohu reported April 20, citing an unnamed investment industry source.

NetEase and Microsoft have formed a basic agreement to operate MSN China through a joint venture, said the report, citing another source close to Microsoft.

SAIL set up the venture with Microsoft in May 2005, and rumors in 2007 said SAIL planned to sell off its 50 percent stake in the JV.

NetEase (Nasdaq:NTES) released a microblogging service at t.163.com on March 20, reports Beijing Times. The service also offers a wireless application protocol (mobile) version and permits 23 more character Sina’s (Nasdaq:SINA) microblogging service, which is limited to 140 characters, the report said.

Tencent (0700.HK) is also working on microblogging and plans to link its own service with instant messaging QQ accounts, said the report.

The9 (Nasdaq:NCTY) announced March 19 that its employment contract with President Xiaowei Chen will be expired on May 16 and not extended due to personal development reasons and The9′s Chairman and CEO Zhu Jun will be acting President since theday, reports Sina. Rumors about Xiaowei Chen’s resignation started April, 2009 when The9 lost the World of Wartcraft license to NetEase (Nasdaq:NTES) and rumor last June said that she has renewed her contract with The9 for another two years.
Former president of CDC Corporation (Nasdaq: CHINA) subsidiaries CDC Games and China.com (8006.HK) joined The9 on May 16, 2008.

Shenzhen-based download software provider Xunlei released an updated online game ranking based on client-end downloads from Xunlei’s site gougou.com on March 1. The top ten online games for the week ending February 28 were:

1. Cross Fire (Operator, Developer: Tencent (0700.HK), SmileGate)
2. QQ Speed (Tencent)
3. TianXia II (TX2) (NetEase (Nasdaq:NTES)
4. Kart Rider (Shiji Tiancheng, Nexon)
5. World of Warcraft (NetEase, Blizzard Entertainment)
6. Legend of Mir 2 (Shanda (Nasdaq:SNDA), Wemade)
7. Dungeon and Fighter (Tencent, Neople)
8. Tian Long Ba Bu (Changyou (Nasdaq:CYOU))
9. Chuan Yue Online (Shanda, Beijing Chuanyue Shidai Information Technology)
10. Zhu Xian Online (Perfect World (Nasdaq:PWRD))

The project chief for NetEase’s (Nasdaq:NTES) licensed MMORPG World of Warcraft (WoW), Li Riqiang, has resigned, National Business Daily reports February 24.

NetEase’s official, written statement to the press did not address the company’s choice of a replacement for Li, the report said. An unnamed NetEase employee said that the company does not plan to appoint another person who will be responsible for speaking to the press, the report said.

Li joined NetEase’s marketing department in 2003, the Economic Observer reported in July 2009.

China’s General Administration of Press and Publications announced on February 12 that it had approved NetEase affiliate Shanghai EaseNet Network Technology to operate “The Burning Crusade,” the first expansion of WoW, in China.

Internet and online game service provider NetEase (Nasdaq:NTES) booked net profit of $83.8 million for the fourth quarter of 2009, or diluted earnings of $0.64 per American depositary share, compared to $84.4 million in the year-ago period and $57.7 million in the third quarter of 2009. Total revenues grew 62.2% annually and 47.8% sequentially to $189 million in the quarter.

Fourth quarter online game revenue spiked 63.6% annually and 41.9% from the previous quarter to $159.4 million, as NetEase recorded a full quarter of operations of 3D MMORPG World of Warcraft following the game’s re-launch in September 19, 2009. The royalties, amortization of license fees and technical consultancy service fees associated with a full quarter of WoW operation trimmed the gross profit margin for NetEase’s online game business to 70.8% in the fourth quarter, compared to 88% and 79.9% in the year- and quarter-ago periods.

Advertising services revenue climbed 64.3% year-on-year and 113.6% quarter-on-quarter to $26.9 million in the fourth quarter, as consumer spending rebounded and NetEase restructured its portal business and launched new marketing strategies. Revenues from wireless value-added services and other channels were roughly flat from the previous quarter at $2.7 million.

For the full year 2009, NetEase book net profit of $271.1 million, up 18.8% from 2008, and total revenues of $560.1 million, up 26.7% on an annual basis. The increase in revenue was partially offset by an increase in the cost of revenues, from RMB 559.6 million in 2008 to RMB 952.2 million in 2009, due to staff expenses, licensing and other fees associated with operating World of Warcraft.

NetEase’s fourth quarter launches included the ninth expansion pack for Fantasy Westward Journey in October 2009; an expansion pack for Tianxia II in December; and the commercial launch of the company’s second webgame, Storm of Empires in December, said company CEO and Director William Ding.