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NetEase.com Releases Q3 2008 Unaudited Financial Results

Chinese Internet portal and online game firm NetEase.com (NTES) says its total revenues grew as it announced its unaudited financial results for the third quarter ended September 30, 2008.

Total revenues for the third quarter of 2008 were CNY806.6 million, compared to CNY715.9 million and CNY571.1 million for the preceding quarter and the third quarter of 2007, respectively. Revenues from online games were CNY675.1 million for the third quarter of 2008, compared to CNY595.0 million and CNY468.7 million for the preceding quarter and the third quarter of 2007, respectively. Revenues from advertising services were CNY113.0 million for the third quarter of 2008, compared to CNY103.9 million and CNY85.5 million for the preceding quarter and the third quarter of 2007, respectively. Revenues from wireless value-added services and others were CNY18.5 million for the third quarter of 2008, compared to CNY16.9 million for each of the preceding quarter and the third quarter of 2007.

Gross profit for the third quarter of 2008 was CNY631.3 million, compared to CNY722.8 million and CNY441.9 million for the preceding quarter and the third quarter of 2007, respectively. The quarter-over-quarter decrease was primarily attributable to the receipt of a business tax refund of CNY146.8 million in June 2008 and increased content costs arising from Olympic-related price increases by content providers. The decrease was partially offset by increased online game and advertising services revenues in the current quarter.

Gross profit margin for the online game business for the third quarter of 2008 was 89.7%, compared to 91.2% and 89.4% for the preceding quarter and the third quarter of 2007, respectively. Gross profit margin for the advertising business for the third quarter of 2008 was 26.9%, compared to 52.6% and 54.0% for the preceding quarter and the third quarter of 2007, respectively.

Total operating expenses for the third quarter of 2008 were CNY164.6 million, compared to CNY149.7 million and CNY179.0 million for the preceding quarter and the third quarter of 2007, respectively.

Net profit for the third quarter of 2008 totaled CNY313.3 million, compared to CNY438.2 million and CNY260.2 million for the preceding quarter and the third quarter of 2007, respectively.

As of September 30, 2008, the company's total cash and time deposit balance was CNY5.28 billion, compared to CNY4.16 billion as of December 31, 2007.

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