NetEase.com reports Q4 and 2010 unaudited results
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NetEase.com, Inc. (Nasdaq: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2010.
William Ding, Chief Executive Officer and Director of NetEase, stated, "We ended 2010 with strong fourth quarter results in both online games and advertising services, delivering solid sequential and year-over-year revenue growth. Fourth quarter online game revenues increased 13% quarter-over-quarter and 31% year-over-year, driven primarily by the Wrath of the Lich King(TM) expansion pack launched on August 31, 2010 for World of Warcraft(R), a game licensed from Blizzard Entertainment, and the outstanding performances from our fastest growing self-developed games, Tianxia II, Heroes of Tang Dynasty and Westward Journey Online II. The combination of the first full year of operation of World of Warcraft and the impact of successful large scale promotions for Fantasy Westward Journey, Tianxia II and Westward Journey Online II, as well as the launch of Heroes of Tang Dynasty in April 2010 and its first expansion pack in August 2010, drove annual online game services revenue growth up by 47% for 2010. During the fourth quarter of 2010, we were pleased to see that revenue from Westward Journey Online II reached a new high.
"Game expansion and pipeline development is proceeding well in the new year beginning with the release of the tenth expansion pack for Fantasy Westward Journey in January 2011. The latest expansion features a new story line and setting and adds new characters that enhance the game's visual appeal and challenge for players. We have on schedule numerous other expansion packs in process for release in 2011. These will include updates for Tianxia II, Heroes of Tang Dynasty, Westward Journey Online II and III, Legend of Westward Journey, Ghost and Westward Journey: Genesis, among others. Overall, our top strategic priorities in online games this year include accelerating our product development time-to-market and further enhancing our highly competitive and innovative technology and commercial appeal.
"In advertising services, revenue growth was consistently strong throughout 2010, underscored by quarter-over-quarter and year-over-year increases of 44% and 27% for the fourth quarter, respectively, and an increase of 65% for the full year," Mr. Ding continued. "Our improved internal organizational structure supported excellent sales execution and customer relationship development in 2010. We integrated a number of new products, services and channels into our portal that have drawn a substantial number of new users and improved user traffic statistics. In 2010, our large investments in promotional activities through sponsorship and support of major Chinese national events and programs paid off well, which we believe successfully raised our portal's standing and delivered outstanding value-for-money advertising services to our advertisers."
Mr. Ding concluded, "In conjunction with our online games strategy for 2011, for our portal business, we will focus on new product applications in mobile phones and will explore new advertising formats and marketing models to attract premier advertisers and stimulate ad spending. We are working to achieve healthy growth across our business in 2011 in line with anticipated market expansion in order to maintain our leading position in China's burgeoning Internet community."
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