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NetEase.com Reports First Quarter 2010 Unaudited Financial Results
May 19, 2010 (06:05 PM EDT)


BEIJING, May 19 /PRNewswire-Asia/ -- NetEase.com, Inc. (Nasdaq: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the first quarter ended March 31, 2010.

William Ding, Chief Executive Officer and Director of NetEase, stated, "For the first quarter, total revenues from online games increased by approximately 50% year-over-year, primarily due to revenues generated from new games and the operation of Blizzard Entertainment's World of Warcraft(R).

"Our fourth quarter 2009 release of Fantasy Westward Journey's ninth expansion pack, Ancient Runes, delivered favorable feedback from players as reflected in the new player statistics during the first quarter of 2010 as compared with the preceding quarter. We plan to launch two additional expansion packs for Westward Journey II and III during the third quarter of 2010, reflecting our continuing effort to update content and promote new user interest for these games.

"The Flying Dragon expansion pack for Tianxia II was launched in December 2009 and, as expected, delivered strong growth in new player statistics for the first quarter. We plan to issue another new expansion pack to coincide with the first anniversary of Tianxia II in September 2010, along with a series of sales promotion activities to drive further growth for this game. We also commercially launched Heroes of Tang Dynasty in April 2010 following successful closed beta testing results, and plan to launch an expansion pack for this game in the fourth quarter of 2010.

"World of Warcraft, a game licensed from Blizzard Entertainment, performed well during the first quarter. In addition, we are currently testing ways to expand the game's presence in certain second- and third-tier cities in China. Our application for the launch of Blizzard Entertainment's Wrath of the Lich King(R), the game's second expansion set, is currently under regulatory review."

Mr. Ding continued, "Our advertising revenue for the first quarter of 2010 was more than double that of the first quarter of 2009, which indicates the rebound in the Chinese advertising market and successful execution of our advertising and portal development strategies. The quarter-over-quarter decline of approximately 50% from our strong fourth quarter 2009 revenue result reflects typical industry seasonality. Portal traffic grew steadily in the first quarter, and we achieved our largest quarterly increase in new e-mail accounts in over a year."

First Quarter 2010 Financial Results

Revenues

Total revenues for the first quarter of 2010 were RMB1.2 billion (US$175.1 million), compared to RMB1.3 billion and RMB781.7 million for the preceding quarter and the first quarter of 2009, respectively.

Revenues from online games were RMB1.1 billion (US$159.0 million) for the first quarter of 2010, compared to RMB1.1 billion and RMB724.0 million for the preceding quarter and the first quarter of 2009, respectively.

Revenues from advertising services were RMB91.5 million (US$13.4 million) for the first quarter of 2010, compared to RMB183.7 million and RMB41.0 million for the preceding quarter and the first quarter of 2009, respectively.

Revenues from wireless value-added services and others ("WVAS and others") were RMB18.1 million (US$2.6 million) for the first quarter of 2010, compared to RMB18.5 million and RMB16.6 million for the preceding quarter and the first quarter of 2009, respectively.

Gross Profit

Gross profit for the first quarter of 2010 was RMB780.7 million (US$114.4 million), compared to RMB844.1 million and RMB641.7 million for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter decrease in gross profit was primarily attributable to a seasonal decline in advertising revenue. The year-over-year increase in gross profit was primarily attributable to increased online game revenue, mainly from World of Warcraft operations, and increased advertising revenue, mainly attributable to the rebound in the Chinese advertising market and the successful execution of our advertising and portal development strategies in the first quarter of 2010. The foregoing revenue increases were partially offset by increased cost of revenues, mainly attributable to royalties and consultancy fees related to World of Warcraft operations, headcount-related staffing costs for both the online game and advertising businesses and increased content costs in the first quarter of 2010.

Gross Profit (Loss) Margin

Gross profit margin for the online game business for the first quarter of 2010 was 72.1%, compared to 70.8% and 90.0% for the preceding quarter and the first quarter of 2009, respectively. The slight quarter-over-quarter improvement in gross profit margin was due to the change of product mix in the first quarter of 2010. The year-over-year decrease in gross profit margin was primarily due to World of Warcraft operations in the current quarter. Lower margin was reported for World of Warcraft operations compared to the Company's in-house developed games primarily because of royalties, amortization of license fees and technical consultancy service fees associated with the licensing and operation of Blizzard Entertainment's World of Warcraft.

Gross profit margin for the advertising business for the first quarter of 2010 was 22.9%, compared to 58.4% and gross loss margin of 13.1% for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter decrease in gross profit margin was primarily due to a significant decrease in advertising revenues as explained above, which was partially offset by a relatively small reduction in related costs of revenue. The year-over-year increase in gross profit margin was primarily due to the significant increase in advertising revenue in the first quarter of 2010 as explained above.

Gross loss margin for the WVAS and others business for the first quarter of 2010 was 34.0%, compared to 38.5% and 22.3% for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter decrease in gross loss margin was mainly due to reduced depreciation charge as servers associated with WVAS operations became fully depreciated and reduced other miscellaneous cost of revenues in the current quarter. The year-over-year increase in gross loss margin was mainly due to increased server custody usage fees in the current quarter resulting from volume increases associated with the Company's free email and photo blog services and higher headcount-related costs, partially offset by reduced depreciation charge in the current quarter as assets became fully depreciated.

Operating Expenses

Total operating expenses for the first quarter of 2010 were RMB225.7 million (US$33.1 million), compared to RMB237.0 million and RMB150.6 million for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter decrease in operating expenses was mainly due to reduced marketing spending on corporate brand-building and game-specific promotional activities in the current quarter and decreased headcount-related staffing costs. The year-over-year increase in operating expense was primarily due to the significant increases in advertising spending on corporate-brand building and marketing promotion of Fantasy Westward Journey and Blizzard Entertainment's World of Warcraft, and increased headcount-related staffing costs in the sales and marketing and research and development areas.

Net Profit

Net profit for the first quarter of 2010 totaled RMB452.3 million (US$66.3 million), compared to RMB571.8 million and RMB416.7 million for the preceding quarter and the first quarter of 2009, respectively. During the first quarter of 2010, the Company reported a net foreign exchange loss of RMB39.5 million (US$5.8 million) under Other, net, compared to RMB15.3 million and RMB47.5 million for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter and year-over-year changes in foreign exchange losses were mainly due to the translation losses arising from the Company's Euro-denominated bank deposit balances as of March 31, 2010 as the exchange rate of the Euro against the RMB fluctuated over the periods. NetEase reported basic and diluted earnings per ADS of US$0.51 each for the first quarter of 2010. The Company reported basic and diluted earnings per ADS of US$0.65 and US$0.64 and US$0.48 and US$0.47 for the preceding quarter and the first quarter of 2009, respectively.

Income Taxes

The Company recorded a net income tax charge of RMB94.5 million (US$13.8 million) for the first quarter of 2010, compared with RMB71.2 million and RMB61.7 million for the preceding quarter and the first quarter of 2009, respectively. The effective tax rate for the first quarter of 2010 was 17.4% as compared to 11.3% and 12.9% for the preceding quarter and the first quarter of 2009, respectively. The quarter-over-quarter increase in effective tax rate was mainly due to the reduction in income tax charge of certain subsidiaries for the first three quarters of 2009 recorded in the fourth quarter of 2009, reflecting qualification for preferred tax status being received in December 2009. The year-over-year increase in effective tax rate was primarily due to the fact that one of the Company's principal subsidiaries reported its tax charge at the rate of 7.5% in the first quarter of 2009 as well as the fact that the net income derived from operations of Blizzard Entertainment's World of Warcraft is subject to the standard enterprise income tax rate of 25% in China in the first quarter of 2010.

Other Information

As of March 31, 2010, the Company's total cash and time deposit balance was RMB7.7 billion (US$1.1 billion), compared to RMB7.0 billion as of December 31, 2009. In addition, the Company had a restricted cash balance of approximately RMB32.0 million as of March 31, 2010, representing a security guarantee for consulting fee payments due to Blizzard Entertainment for a 12-month period to October 2010. The guarantee will be renewable annually until termination of the license agreement for the operations of World of Warcraft.

Cash flow generated from operating activities was RMB676.5 million (US$99.1 million) for the first quarter of 2010, compared to RMB712.4 million and RMB567.8 million for the preceding quarter and the first quarter of 2009, respectively.

** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.8258 on March 31, 2010 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on March 31, 2010, or at any other certain date. The percentages stated are calculated based on RMB.

Notes to Unaudited Financial Information

The unaudited financial information disclosed in this press release is preliminary. The audit of the financial statements and related notes to be included in the Company's annual report on Form 20-F for the year ended December 31, 2009 is still in progress. In addition, because an audit of the Company's internal controls over financial reporting in connection with section 404 of the Sarbanes-Oxley Act of 2002 has not yet been completed, the Company makes no representation as to the effectiveness of those internal controls as of the end of fiscal year 2009.

Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between the Company's audited financial statements and this preliminary unaudited financial information.

Conference Call

NetEase's management team will host a conference call at 9:00 p.m. Eastern Time on Wednesday, May 19, 2010 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, May 20, 2010). Chief Executive Officer William Ding and Acting Chief Financial Officer Onward Choi will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 877-941-2069 (international: 480-629-9713), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 800-406-7325 (international 303-590-3030), and entering passcode 4291513#. The replay will be available through June 2, 2010.

This call is being webcast live and the replay will be available for 12 months. Both will be available on NetEase's corporate web site at http://corp.netease.com , Investor Info: Earnings Call.

About NetEase

NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia II and Datang, as well as the licensed game, Blizzard Entertainment's World of Warcraft.

NetEase also offers online advertising on its websites which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the Web which are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.

Other community services which the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. NetEase is also the largest provider of free email services in China. Furthermore, the NetEase websites provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

Forward-looking Statements

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that NetEase will not be successful in its product diversification efforts, including its focus on item- and fee-based games and entry into strategic licensing arrangements; the risk that the online game market will not continue to grow or that NetEase will not be able to maintain its leading position in that market, which could occur if, for example, its new online games or expansion packs and other improvements to its existing games do not become as popular as management anticipates; the ability of NetEase to effectively market its games and other services and achieve a positive return on its marketing expenditures; the risk that Shanghai EaseNet will not be able to continue operating World of Warcraft or other games licensed by it for a period of time or permanently due to possible governmental actions; the risk that Shanghai EaseNet or NetEase will be subject to penalties or operating restrictions imposed by governmental authorities in the PRC resulting from the operations of their online games, including suspension of their Internet service or other penalties; the risk that changes in Chinese government regulation of the online game market may limit future growth of NetEase's revenue or cause revenue to decline; uncertainty regarding the effectiveness of marketing programs for NetEase's online advertising business in China; the risk that NetEase may not be able to continuously develop new and creative online services; the risk that NetEase will not be able to control its expenses in future periods; competition in NetEase's existing and potential markets; governmental uncertainties (including possible changes in the effective tax rates applicable to NetEase and its subsidiaries and affiliates and the ability of NetEase to receive and maintain approvals of the preferential tax treatments and general competition and price pressures in the marketplace); the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect NetEase's business and financial results; and other risks outlined in NetEase's filings with the Securities and Exchange Commission. NetEase does not undertake any obligation to update this forward-looking information, except as required under the applicable law.

    For further information, please contact:

    NetEase.com, Inc.
     Brandi Piacente
     Investor Relations
     Email: brandi@corp.netease.com
     Tel:   +1-212-481-2050

     Li Jia
     Email: liddyli@corp.netease.com
     Tel:   +86-10-8255-8208



    NETEASE.COM, INC.
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
    (RMB and USD in thousands)
                                         December 31, March 31,   March 31,
                                             2009        2010        2010
                                              RMB         RMB         USD
                                                                    (Note 1)
    Assets

    Current assets:
     Cash                                  1,041,290   1,443,105     211,419
     Time deposits                         5,975,378   6,234,955     913,439
     Restricted cash                         123,864      32,000       4,688
     Accounts receivable, net                187,340     143,079      20,961
     Prepayments and other current assets    568,125     472,035      69,155
     Deferred tax assets                      76,565      66,981       9,813
    Total current assets                   7,972,562   8,392,155   1,229,475

    Non-current assets:
     Property, equipment and software,
      net                                    557,756     562,351      82,386
     Land use right, net                      12,305      12,240       1,793
     License right, net                      212,847     196,028      28,719
     Deferred tax assets                       4,188       1,823         267
     Other long-term assets                   43,811      43,873       6,428
    Total non-current assets                 830,907     816,315     119,593
    Total assets                           8,803,469   9,208,470   1,349,068

    Liabilities and Shareholders' Equity

    Current liabilities:
     Accounts payable                        238,435     131,414      19,253
     Salary and welfare payables             129,493      88,553      12,973
     Taxes payable                           213,727     210,143      30,787
     Deferred revenue                        583,470     656,615      96,196
     Accrued liabilities and other
      payables                               212,800     236,030      34,579
    Total current liabilities              1,377,925   1,322,755     193,788

    Long-term payable:
     Other long-term payable                     200         200          29
    Total long-term payable                      200         200          29

    Total liabilities                      1,378,125   1,322,955     193,817

    Shareholders' equity                   7,425,344   7,885,515   1,155,251

    Total liabilities and shareholders'
     equity                                8,803,469   9,208,470   1,349,068

    The accompanying notes are an integral part of this press release.



    NETEASE.COM, INC.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (RMB and USD in thousands, except per share data)

                                                 Quarter Ended
                                   March 31, December 31, March 31, March 31,
                                       2009       2009      2010       2010
                                       RMB        RMB        RMB        USD
                                                                     (Note 1)
    Revenues:
    Online game services             724,024  1,088,041  1,085,322    159,003
    Advertising services              41,030    183,679     91,548     13,412
    Wireless value-added
     services and others              16,641     18,480     18,060      2,646

    Total revenues                   781,695  1,290,200  1,194,930    175,061
    Business taxes                    (5,772)   (40,291)   (30,442)    (4,459)

    Total net revenues               775,923  1,249,909  1,164,488    170,602

    Total cost of revenues          (134,229)  (405,787)  (383,788)   (56,226)

    Gross profit                     641,694    844,122    780,700    114,376

    Operating expenses:
    Selling and marketing expenses   (47,511)  (119,780)  (103,812)   (15,210)
    General and administrative
     expenses                        (52,296)   (54,159)   (54,879)    (8,040)
    Research and development
     expenses                        (50,789)   (63,054)   (66,996)    (9,815)
    Total operating expenses        (150,596)  (236,993)  (225,687)   (33,065)

    Operating profit                 491,098    607,129    555,013     81,311
    Other income (expenses):
    Investment income                    103         83         76         11
    Interest income                   35,560     29,746     30,785      4,510
    Other, net                       (48,319)    (7,571)   (42,230)    (6,187)

    Net income before tax            478,442    629,387    543,644     79,645
    Income tax                       (61,739)   (71,194)   (94,515)   (13,847)

    Net income after tax             416,703    558,193    449,129     65,798
    Net loss attributable to
     noncontrolling interests             18     13,574      3,129        458
    Net income attributable to the
     Company's shareholders          416,721    571,767    452,258     66,256

    Earnings per share, basic           0.13       0.18       0.14       0.02
    Earnings per ADS, basic             3.25       4.42       3.49       0.51
    Earnings per share, diluted         0.13       0.18       0.14       0.02
    Earnings per ADS, diluted           3.23       4.39       3.47       0.51

    Weighted average number of
     ordinary shares outstanding,
     basic                         3,207,760  3,237,488  3,239,858  3,239,858
    Weighted average number of ADS
     outstanding, basic              128,310    129,500    129,594    129,594
    Weighted average number of
     ordinary shares outstanding,
     diluted                       3,224,599  3,259,644  3,259,490  3,259,490
    Weighted average number of ADS
     outstanding, diluted            128,984    130,386    130,380    130,380

    The accompanying notes are an integral part of this press release.



    NETEASE.COM, INC.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (RMB and USD in thousands)
                                                Quarter Ended
                                 March 31,  December 31, March 31,  March 31,
                                    2009        2009        2010       2010
                                     RMB         RMB         RMB        USD
                                                                     (Note 1)
    Cash flows from operating
     activities:
    Net income                      416,703     558,193     449,129    65,798
    Adjustments to reconcile net
     profit to net cash provided
     by operating activities:

    Depreciation and
     amortization                    21,979      58,657      58,839     8,620
    Share-based compensation
     cost                            10,815       5,774       5,861       859
    Allowance for (reversal of)
     provision for doubtful
     debts                            6,135       1,508      (9,361)   (1,371)
    Loss on disposal of
     property, equipment and
     software                            17         667      10,538     1,544

    Unrealized exchange losses       47,547      13,305      50,301     7,369
    Net equity share of loss
     (profit) from associated
     companies                        1,051        (168)        132        19
    Changes in operating assets
     and liabilities:
     Accounts receivable            111,878     (71,358)     53,622     7,856
     Prepayments and other
      current assets                (31,374)   (116,969)    110,172    16,142
     Deferred tax assets            (17,350)    (16,698)     11,949     1,750
     Accounts payable               (35,769)     65,450    (109,712)  (16,073)
     Salary and welfare payables    (37,516)     65,651     (40,940)   (5,998)
     Taxes payable                   29,203      51,631     (20,875)   (3,058)
     Deferred revenue                 7,047      16,959      73,145    10,716
     Accrued liabilities and
      other payables                 37,418      79,764      33,730     4,942
     Net cash provided by
      operating activities          567,784     712,366     676,530    99,115

    Cash flows from investing
     activities:
     Purchase of property,
      equipment and software        (23,031)    (54,091)    (60,135)   (8,810)
     Proceeds from sale of
      property, equipment and
      software                           16          10          --        --
     Transfer from/(to)
      restricted cash               (82,000)    (41,863)     91,864    13,458
     Net change in time deposits
      with terms of three months    913,789     (39,622)    (76,782)  (11,249)

     Placement/rollover of
      matured time deposits      (2,099,024) (2,646,827) (2,771,650) (406,055)
     Uplift of matured time
      deposits                      718,163   1,752,281   2,540,391   372,175
     Net change in other assets        (634)         50      (1,977)     (290)
     Net cash used in investing
      activities                   (572,721) (1,030,062)   (278,289)  (40,771)

    Cash flows from financing
     activities:
     Capital contribution from
      noncontrolling interests        2,525          16          --        --
     Proceeds from employees
      exercising stock options           --       2,965       5,182       759
     Net cash provided by
      financing activities            2,525       2,981       5,182       759

     Effect of exchange rate
      changes on cash held in
      foreign currencies              1,201        (300)     (1,608)     (236)

     Net increase (decrease) in
      cash                           (1,211)   (315,015)    401,815    58,867
    Cash, beginning of the
     period                         793,408   1,356,305   1,041,290   152,552
    Cash, end of the period         792,197   1,041,290   1,443,105   211,419

    Supplemental disclosures of
     cash flow information:
      Cash paid for income tax,
       net of tax refund             45,080      80,044      62,264     9,122
    Supplemental schedule of
     non-cash investing and
     financing activities:

     Fixed asset purchases
      financed by accounts
      payable and accrued
      liabilities                    35,955      47,427      39,625     5,805

    The accompanying notes are an integral part of this press release.



    NETEASE.COM, INC.
    UNAUDITED SEGMENT INFORMATION
    (RMB and USD in thousands)

                                                   Quarter Ended
                                      March 31,  December   March 31, March 31,
                                        2009    31, 2009      2010      2010
                                         RMB        RMB        RMB       USD
                                                                      (Note 1)
    Revenues:
    Online game services               724,024  1,088,041  1,085,322  159,003
    Advertising services                41,030    183,679     91,548   13,412
    Wireless value-added services and
     others                             16,641     18,480     18,060    2,646
    Total revenues                     781,695  1,290,200  1,194,930  175,061

    Business taxes:
    Online game services                (1,457)   (22,466)   (21,108)  (3,092)
    Advertising services                (4,162)   (17,574)    (8,979)  (1,315)
    Wireless value-added services and
     others                               (153)      (251)      (355)     (52)
    Total business taxes                (5,772)   (40,291)   (30,442)  (4,459)

    Net revenues:
    Online game services               722,567  1,065,575  1,064,214  155,911
    Advertising services                36,868    166,105     82,569   12,097
    Wireless value-added services and
     others                             16,488     18,229     17,705    2,594
    Total net revenues                 775,923  1,249,909  1,164,488  170,602

    Cost of revenues:
    Online game services               (72,364)  (311,402)  (296,436) (43,430)
    Advertising services               (41,708)   (69,143)   (63,626)  (9,321)
    Wireless value-added services and
     others                            (20,157)   (25,242)   (23,726)  (3,475)
    Total cost of revenues            (134,229)  (405,787)  (383,788) (56,226)

    Gross profit (loss):
    Online game services               650,203    754,173    767,778  112,481
    Advertising services                (4,840)    96,962     18,943    2,776
    Wireless value-added services and
     others                             (3,669)    (7,013)    (6,021)    (881)
    Total gross profit                 641,694    844,122    780,700  114,376

    Gross profit (loss) margin:
    Online game services                 90.0%      70.8%      72.1%    72.1%
    Advertising services                (13.1%)     58.4%      22.9%    22.9%
    Wireless value-added services and
     others                             (22.3%)    (38.5%)    (34.0%)  (34.0%)

    The accompanying notes are an integral part of this press release.


    NETEASE.COM, INC.
    NOTES TO UNAUDITED FINANCIAL INFORMATION

    Note 1: The conversion of Renminbi (RMB) into United States dollars (USD)
            is based on the noon buying rate of USD1.00 = RMB6.8258 on March
            31, 2010 as set forth in the H.10 statistical release of the U.S.
            Federal Reserve Board.
    Note 2: Share-based compensation cost reported in the Company's unaudited
            condensed consolidated statements of operations is set out as
            follows in RMB and USD (in thousands):


                                                    Quarter Ended
                                         March 31, December March 31, March 31,
                                            2009   31, 2009   2010     2010
                                             RMB      RMB      RMB      USD
                                                                     (Note 1)
    Share-based compensation cost
     included in:
    Cost of revenue                         2,872    1,811    1,670     245
    Operating expenses
    - Selling and marketing expenses          952      342      320      47
    - General and administrative expenses   3,810    1,607    1,823     267
    - Research and development expenses     3,181    2,014    2,048     300

SOURCE NetEase.com, Inc.