NetEase may expand its Web search business

08:33, May 21, 2010      

Email | Print | Subscribe | Comments | Forum 

NetEase.com Inc, China's third-biggest online games provider, said it may acquire companies to expand its Internet search business, after Google Inc moved its Chinese service offshore.

"If an acquisition can help the development of our search business, then why not go for it," NetEase Chief Executive Officer William Ding said during a conference call on Thursday. The Beijing-based company will also consider acquisitions beyond Web search, he said.

Google, owner of the world's most-popular search service, lost market share in China after redirecting its Google.cn service to a Hong Kong site. NetEase's Youdao search service now accounts for 0.4 percent of the local search-engine market, according to researcher Analysys International.

NetEase, trailing Tencent Holdings Ltd and Shanda Games Ltd in China's $3.95 billion online games market, on Wednesday reported first-quarter profit rose 8.5 percent to 452.3 million yuan ($66.2 million), from 416.7 million yuan a year earlier. The earnings missed the 545 million yuan average of five analysts' estimates compiled by Bloomberg.

NetEase American Depositary Receipts (ADRs) fell less than 1 percent to $31.11 in Nasdaq Stock Market trading on Wednesday before the earnings announcement. The receipts have declined 17 percent this year, compared with a 10 percent drop in the Hong Kong-traded shares of Tencent, China's biggest Internet company by market value.

Profitability slumps

Google accounted for 30.9 percent of China's online search market last quarter, compared with 35.6 percent in the previous three months, according to data from Analysys. Baidu Inc increased its market share to 64 percent from 58.4 percent, according to the Beijing-based researcher.

The 0.4 percent market share for NetEase's Youdao service ranks it below Sohu.com Inc's Sogou service, the third-most-popular Web search service in China, according to Analysys.

Revenue from online games rose 50 percent to 1.09 billion yuan in the quarter, NetEase said. Sales of online advertising more than doubled to 91.5 million yuan.

Profitability declined last quarter as NetEase incurred higher marketing expenses and royalty fees for its "World of Warcraft" role-playing game, licensed from Activision Blizzard Inc. Gross profit margin for the online games division narrowed to 72.1 percent in the first quarter, declining from 90 percent a year earlier.

Source: China Daily

(Editor:黄硕)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Fourth-grader Ma Lianghai (left) and third-grader Ma Linxiang are engrossed in their work during art class at Zhaojia Elementary School in Dongxiang, Gansu province, on Sept 18. (Photo by Xu Jingxing/China Daily)
  • A model presents a creation by Jannette Klein University, during the DFashion Mexico, Spring-Summer 2011-2012, in Mexico City, capital of Mexico, on Sept. 26, 2011. (Xinhua/Claudio Cruz)
  • The wax figure of actress Audrey Hepburn is seen at the Madame Tussauds Hong Kong in Hong Kong, south China, Sept. 27, 2011. The wax figure of Audrey Hepburn was unveiled in Hong Kong on Tuesday. (Xinhua/Chen Xiaowei)
  • Photo taken on Sept. 26, 2011 shows lighting illuminating the night sky in Guangzhou, capital of south China's Guangdong Province. The first Guangzhou International Lighting Festival kicked off here on Monday. (Xinhua/Shen Dunwen)
  • The graphic shows the schematic image of Chinese space station. (Xinhua/Lu Zhe)
  • The injured are wheeled to a hospital following a subway train collision in Shanghai, east China, Sept. 27, 2011. A subway train rear-ended another Tuesday afternoon in Shanghai.  Over 260 people injured in the accident were seen receiving treatment in hospitals as of 7:30 p.m. Tuesday, according to local authorities.(Xinhua/Liu Ying)
Hot Forum Discussion