INVESTOR PRESENTATIONDecember 2009Safe HarborSafe HarborThispresentationcontainsstatementsofaforward-lookingnature.Thesestatementsaremadeunderthe”safeharbor”provisionsoftheU.S.PrivateSecuritiesLitigationReformActof1995.Youcanidentifytheseforward-lookingstatementsbyterminologysuchaswill, expects, anticipates, future, intends, plans, believes, estimates andsimilar statements. These forward-looking statements are based on the currentassumptions,expectationsandprojectionsoftheCompanysmanagementaboutfutureevents. Although the assumptions, expectations and projections reflected in theseforward-lookingstatementsrepresentmanagementsbestjudgmentatthetimeofthispresentation,theCompanycangivenoassurancethattheywillprovetobecorrect.Numerousfactors,includingthoserelatedtomarketconditionsandthosedetailedfromtime-to-timeintheCompanysfilingswiththeSecuritiesExchangeCommission,maycauseresultsoftheCompanytodiffermateriallyfromthoseanticipatedintheseforward-lookingstatements.ManyofthefactorsthatwilldeterminetheCompanysfutureresultsare beyond the ability of the Company to control or predict. These forward-lookingstatementsaresubjecttorisksanduncertaintiesand,therefore,actualresultsmaydiffermaterially. TheCompanycautionsyounottoplaceunduerelianceontheseforward-looking statements. The Company undertakes no obligation to revise or update anyforward-lookingstatements,ortomakeanyotherforward-lookingstatements,whetherasaresultofnewinformation,futureeventsorotherwise.Allreferencesto“Company”and“NetEase”asusedthroughoutthispresentationrefertoNetEase.com,Inc.anditssubsidiaries.2Market SnapshotMarket SnapshotRecentprice(11/24/09):ADSoutstanding,basic:Marketcapitalization:Institutionalownership:Insiderand5%+owners:Cashandtimedeposits(06/30/09):CashperADS,basic:$37.48129.4million$4.85billion47%46%$939.1million$7.253BusinessesBusinessesOnline Games:Online Games:Theleadingproviderofself-developedmassivelymulti-Theleadingproviderofself-developedmassivelymulti-playeronlinerole-playinggames,orMMORPG,toInternetusersinplayeronlinerole-playinggames,orMMORPG,toInternetusersinChina.China.Internet Portal:Internet Portal: ProvidesChineseInternetuserswithonlineservicesProvidesChineseInternetuserswithonlineservicescenteredaroundcontent,communityandcommunication,andcenteredaroundcontent,communityandcommunication,andcommerce.commerce.Advertising Services:Advertising Services: EnablesadvertiserstoreachoneofthelargestEnablesadvertiserstoreachoneofthelargestuserbasesinChina.userbasesinChina.Email and Blog Services:Email and Blog Services:ThelargestprovideroffreeemailservicesThelargestprovideroffreeemailservicesinChina,whichhasgreatmarketingvalueforadvertiserswhowishtoinChina,whichhasgreatmarketingvalueforadvertiserswhowishtoreachouraudienceofconsumers.reachouraudienceofconsumers.Search Engine:Search Engine: Youdao.comYoudao.comreflectsa3-yearinvestmentincreatingareflectsa3-yearinvestmentincreatingacomprehensiveChinesesearchtechnology.comprehensiveChinesesearchtechnology.Wireless VAS:Wireless VAS:Offersawide-rangeofserviceswhichallowsuserstoOffersawide-rangeofserviceswhichallowsuserstoreceivenewsandotherinformationontheirmobilephones.receivenewsandotherinformationontheirmobilephones.“A leading China-based Internet technology and online game services company that pioneered the development of applications, services and other technologies for the Internet in China.” 4A Massive Marketing PlatformA Massive Marketing PlatformNetEaseNetEasefamilyofwebsitesprovideamassiveinteractivemarketingfamilyofwebsitesprovideamassiveinteractivemarketingplatformforadvertisers:platformforadvertisers: 1billionaveragedailypageviewsforthemonthof1billionaveragedailypageviewsforthemonthofSeptember2009.September2009. AccesstoanextremelylargeandloyaluserbasewhoareAccesstoanextremelylargeandloyaluserbasewhoareyoungtrendsetters.youngtrendsetters.TheCompanysstrategyistoleverageitsmarket-leadingpositioninTheCompanysstrategyistoleverageitsmarket-leadingpositioninfreeemailserviceandblogswithadvertisersandprovidethemfreeemailserviceandblogswithadvertisersandprovidethemaccesstoitsuserbaseaccesstoitsuserbaseSino-monitorsChinaMarketingandMediaStudynamedSino-monitorsChinaMarketingandMediaStudynamedNetEaseNetEase asthenumberonemediaforuniversitystudentsamongallasthenumberonemediaforuniversitystudentsamongalltraditionalandonlinemediainChinatraditionalandonlinemediainChina5NetEaseNetEaseOnline Game PlatformOnline Game Platform6 Self-developed MMORPG in commercial mode: Self-developed MMORPG in commercial mode: FantasyWestwardJourneyFantasyWestwardJourney梦幻西游梦幻西游 2D(time-based)2D(time-based) WestwardJourneyOnlineIIWestwardJourneyOnlineII大话西游大话西游 2D(time-based)2D(time-based)WestwardJourneyOnlineIIIWestwardJourneyOnlineIII大话西游大话西游3 32D(time-based)2D(time-based)DatangDatang大唐豪侠大唐豪侠 2.5(time-based)2.5(time-based)martialartsthemedmartialartsthemedTianxiaIITianxiaII天下贰天下贰3D3D(item-based)(item-based)NewFlyforFunNewFlyforFun新飞飞新飞飞Item-basedItem-basedBiuBiuBiuBiu 魔法火枪团魔法火枪团2D(item-based)2D(item-based)casualcasualTFOnlineTFOnline百变金刚百变金刚3D3D(item-based)(item-based) Online Games Online Games7Fantasy Westward Journey - Fantasy Westward Journey - 梦幻西游梦幻西游 - - 2D (time-based) 2D (time-based)-#1MMORPGgameinChina-#1MMORPGgameinChina-LaunchedinJan2004-LaunchedinJan2004-Timelyupdatesandexpansionpacks-Timelyupdatesandexpansionpacks-RecordPCUof2.56milliononAugust2,2009-RecordPCUof2.56milliononAugust2,2009 Online Games Online Games8Westward Journey Online IIWestward Journey Online II - - 大话西游大话西游-2D (time-based)2D (time-based)-LaunchedinAugust2002-LaunchedinAugust2002-Latestexpansionpack(the10-Latestexpansionpack(the10thth)releasedinAugust2009)releasedinAugust2009-Q3Q3PCUsPCUsof547,000andof547,000andACUsACUsof199,000of199,000 Online Games Online Games9Westward Journey Online III - Westward Journey Online III - 大话西游大话西游3 3-2D (time-based)2D (time-based)-New,improvedversionofWestwardJourneyOnlineII-New,improvedversionofWestwardJourneyOnlineII-CommercializedinSeptember2007-CommercializedinSeptember2007 Online Games Online Games10 DatangDatang - - 大唐豪侠大唐豪侠-2.5 Dimensional, martial-arts themed game2.5 Dimensional, martial-arts themed game-CommercializedinJuly2006-CommercializedinJuly2006 Tianxia II - Tianxia II - 天下贰天下贰-3D item-based game3D item-based game- -GrandGrandscaleopenbetamarketingforopenbetaconductedinscaleopenbetamarketingforopenbetaconductedin September2009September2009 New Fly For Fun New Fly For Fun - - 新新飞飞飞飞 - I- Item-based gametem-based game-Strongaccumulatedregistereduserandaccumulatedpayinguser-Strongaccumulatedregistereduserandaccumulatedpayinguser statisticsfor3Q09statisticsfor3Q09 Online Games Online Games11 BiuBiuBiuBiu - - 魔法火枪团魔法火枪团-Casual item-based gameCasual item-based game TF Online TF Online - - 百变金刚百变金刚- 3D item-based game- 3D item-based game Newest Self-Developed Online GamesNewest Self-Developed Online Games12 Blizzard EntertainmentBlizzard Entertainment-Worldof-WorldofWarcraftWarcraftcommerciallycommerciallylaunchedlaunchedonSeptember19,onSeptember19,2009inPRC2009inPRC- -WarcraftWarcraftIII,III,StarCraftStarCraftII,andII,andBattle.netBattle.netgaminggaming platformsplatforms Licensed Online Games Licensed Online Games13Fantasy Westward Journey & Fantasy Westward Journey & Westward Journey II Peak Concurrent UsersWestward Journey II Peak Concurrent UsersFantasyWestwardJourneyWestwardJourneyOnlineII14Fantasy Westward Journey & Fantasy Westward Journey & Westward Journey II Daily Average Westward Journey II Daily Average Concurrent UsersConcurrent UsersFantasyWestwardJourneyWestwardJourneyOnlineII15 Casual Game Casual Games sReleasedtodate:28miniand7advancedcasualgames.Releasedtodate:28miniand7advancedcasualgames.Ourgoalistoofferthemostuser-friendlyandattractivecasual-gameOurgoalistoofferthemostuser-friendlyandattractivecasual-gameplatforminChina.platforminChina.Ourcasualgamesareeasytoaccess,andaretargetedforbusyOurcasualgamesareeasytoaccess,andaretargetedforbusyindividualswithlimitedtimeforentertainment.individualswithlimitedtimeforentertainment.16 Approximately 1,100 game developers as of Approximately 1,100 game developers as of September September 30, 200930, 2009 4Q09 game commercialization 4Q09 game commercialization-WorldofWorldofSanGuoSanGuo -StormofEmpires-StormofEmpires 4Q09 expansion packs 4Q09 expansion packs- -LegendofWestwardJourneyLegendofWestwardJourney- - TianxiaTianxiaIIII- -NewFlyforFunNewFlyforFun- -TFOnlineTFOnline Game Development Pipeline Game Development Pipeline17Chinese Online Game Market GrowthChinese Online Game Market GrowthQ2 2007 Q2 2009Q2 2007 Q2 2009Source: iResearchs China Online Games Industry Development Research Report, August 31, 200918 ChinaonlinegamesChinaonlinegamesmarketgrowthratesmarketgrowthratesasof2Q09:asof2Q09:+35.9%YOY+35.9%YOY12.1%Q0Q12.1%Q0QNetEaseNetEase Quarterly Online Games Revenue Quarterly Online Games Revenue* Chinas online game market expected to grow to over $3B USD by 2010, according to Research and Markets “Games Market in China“ report.19NetEaseNetEaseInternet PortalInternet Portal20 Advertising Services Advertising ServicesNetEaseNetEaseportalandlargeemailbaseprovidesanidealplatformforportalandlargeemailbaseprovidesanidealplatformforacquiringgamerseconomicallyacquiringgamerseconomicallyNetEaseNetEasecontinuestoemphasizeraisingthelevelofexperienceofitsuserscontinuestoemphasizeraisingthelevelofexperienceofitsusersandincorporatingadditionalonlinefunctionsandincorporatingadditionalonlinefunctionsNetEaseNetEaseemailadspaceisapremiumadtoolformanyadvertiserswhoemailadspaceisapremiumadtoolformanyadvertiserswhowanttoreachwanttoreachNetEaseNetEaseconsumers,especiallytheyoungconsumerwithconsumers,especiallytheyoungconsumerwithdiscretionaryincomediscretionaryincomeNetEaseNetEaseblogservicesaredesignedtoservebothasaplatformforblogservicesaredesignedtoservebothasaplatformfordistributingpersonalinformationandasacommunityserviceandsocialdistributingpersonalinformationandasacommunityserviceandsocialnetworkingplatformnetworkingplatformNetEaseNetEaseiscapitalizingonshiftinadvertisingrevenuetotheInternetfromiscapitalizingonshiftinadvertisingrevenuetotheInternetfromtraditionalmediaadvertisingtraditionalmediaadvertisingNetEaseNetEasecontinuallyaddsnewportalcontentandviewerchannelscontinuallyaddsnewportalcontentandviewerchannels21NetEaseNetEase Quarterly Advertising Services Revenue Quarterly Advertising Services Revenue22China has the Worlds Largest Population of 338 China has the Worlds Largest Population of 338 Million Internet Users and 320 Million Broadband UsersMillion Internet Users and 320 Million Broadband UsersSource:CNNICInternetDevelopmentStudyasofJune30,200923NetEase Continues to Expand NetEase Continues to Expand Content and ServicesContent and ServicesNetEasehasdiversehigh-qualitycontentchannelsandcontinuestoseekNetEasehasdiversehigh-qualitycontentchannelsandcontinuestoseeknewwaystoenhancecontent:newwaystoenhancecontent: Newestchannelsincludeeducation,travel,realestate,andbookNewestchannelsincludeeducation,travel,realestate,andbooksearchandreview(Sept.09)searchandreview(Sept.09)NetEasemaintainsadominantpositionastheleadingfreeemailproviderNetEasemaintainsadominantpositionastheleadingfreeemailproviderinChina.inChina.NetEasecontinuestoupgradeitsadvertisingservicesandtrackingNetEasecontinuestoupgradeitsadvertisingservicesandtrackingsystemstocapturegrowthinthisnascentonlineadvertisingmarket.systemstocapturegrowthinthisnascentonlineadvertisingmarket. 24Search EngineSearch EngineYoudao.comYoudao.com NetEasesNetEasesinnovativesearchengineofficiallylaunchedininnovativesearchengineofficiallylaunchedinDecember2007December2007RSS/blogreaderproduct-“RSS/blogreaderproduct-“YoudaoYoudaoReader”-reachedaReader”-reachedamilestoneonemillionregisteredusersinQ408milestoneonemillionregisteredusersinQ408Shippedfinalversionof“Shippedfinalversionof“YoudaoYoudaoDictionary2.0”inDictionary2.0”inDecember2008December2008LaunchedfirstshoppingsearchengineinChina-“LaunchedfirstshoppingsearchengineinChina-“YoudaoYoudao ProductSearch”-inJanuary2009ProductSearch”-inJanuary200925NetEaseNetEase Wireless VASWireless VAS26* NTES has strategically decreased its focus on WVAS as a result of increased regulation from the mobile operators. NetEase Quarterly WVAS and Other RevenueNetEase Quarterly WVAS and Other Revenue27Financial HighlightsFinancial Highlights28Summary Financial ResultsSummary Financial Results$0.44586072.2%92127313114 2009 Q3 US$ million18.2%867341Advertising services(0.8%)775781724Online game services3.0239440872.2%627868182009 Q3RMB million(16.1%)3.603.23Diluted EPS (per ADS)46851780.2%692863182009 Q2RMB millionQ209-Q309 seq. change2009 Q1RMB million Total revenues:(15.9%)417Net profit(21.1%)491Operating profit82.7%Gross margin(9.3%)642Gross profit0.5%776 Total Net Revenues2.4%17Wireless services and others29Gross Profit Margins2009 Q12009 Q22009 Q3Online game services90.0%88.3%77.9%Advertising services(13.1%)16.6%23.1%Wireless services and others(22.3%)(43.0%)(45.0%)Company overall82.7%80.2%72.2%Gross Profit Margin AnalysisOperating Profit Margins2009 Q12009 Q22009 Q3Company overall63.3%59.9%47.0%30Balance Sheet HighlightsBalance Sheet Highlights1,1647,9467,449Total liabilities and shareholders equity1,0056,8586,459Total shareholders equity1591,088990Total current liabilities76521565 Other current liabilities83567425 Deferred revenueCurrent liabilities:LIABILITIES & SHAREHOLDERS EQUITY1,1647,9467,449Total assets 57387392Other assets78531475Property, equipment and software1,0297,0286,582Total current assets73618371 Other current assets7405,0544,929 Time deposits1991,3561,282 CashCurrent assets:ASSETSUSD millionRMB millionRMB millionSeptember 30, 2009September 30, 2009June 30, 200931Recent HighlightsRecent Highlights32 Recent Highlights Recent HighlightsFantasyWestwardJourneycontinuestodemonstrateitsrobustFantasyWestwardJourneycontinuestodemonstrateitsrobustpersonalityandextensivecommunityofusersamongtime-basedpersonalityandextensivecommunityofusersamongtime-basedonlinegamesinChinaonlinegamesinChinaLicenseagreementforWorldofLicenseagreementforWorldofWarcraftWarcraft,theworldsmost,theworldsmostpopularonlinegamepopularonlinegame LaysgroundworkforcontinuedoperationofLaysgroundworkforcontinuedoperationofWoWWoWinmainlandChinainmainlandChinafollowingexpirationofcurrentlicenseagreementfollowingexpirationofcurrentlicenseagreementWecontinuetoexecutewellonourstrategytodiversifyourself-Wecontinuetoexecutewellonourstrategytodiversifyourself-developedgameproductofferingsdevelopedgameproductofferings Fournewexpansionpackstobereleasedin4Q09Fournewexpansionpackstobereleasedin4Q09 Mostextensivegamedevelopmentteamof1,100Mostextensivegamedevelopmentteamof1,10033 Recent Highlights - continued Recent Highlights - continuedFocusedonstrengtheningthequalityandcontentofourportaltoattractFocusedonstrengtheningthequalityandcontentofourportaltoattractandretainnewusersandadvertiserstooursiteandretainnewusersandadvertiserstooursiteContinuedenhancementofe-mail,blogandsearchproductstoraiseContinuedenhancementofe-mail,blogandsearchproductstoraiseusersexperienceandattractandengagenewusersusersexperienceandattractandengagenewusers EnhancementofouremailandblogservicestodrawmoreusersandcreateEnhancementofouremailandblogservicestodrawmoreusersandcreatepremiumadspaceforadvertiserswhowishtoreachouraudienceofpremiumadspaceforadvertiserswhowishtoreachouraudienceofconsumersconsumers Creatingamarket-leadingsearchengine;highlyversatile,user-friendlyandCreatingamarket-leadingsearchengine;highlyversatile,user-friendlyandgearedspecificallyfortheChineseInternetusergearedspecificallyfortheChineseInternetuser34 Key Takeaways Key TakeawaysFantasyWestwardJourneyremainsthemostpopulargameinChinaandFantasyWestwardJourneyremainsthemostpopulargameinChinaandachievedrecordachievedrecordPCUsPCUsof2.56millioninAugust2009of2.56millioninAugust2009NetEaseNetEasehasstrongestin-housedevelopmentcapability,enablinghasstrongestin-housedevelopmentcapability,enablingcontinuousupgrades,expansionpacksandnewgamecreationcontinuousupgrades,expansionpacksandnewgamecreationNetEaseNetEaseispartneredwithBlizzardEntertainmentforfourgamelicenses,ispartneredwithBlizzardEntertainmentforfourgamelicenses,includingworldsmostpopularMMORPGWorldofincludingworldsmostpopularMMORPGWorldofWarcraftWarcraftNetEaseNetEaseportalandlargeemailbaseprovideanidealandcosteffectiveportalandlargeemailbaseprovideanidealandcosteffectiveplatformforouradvertiserstoreachouttotheirtargetconsumergroupsplatformforouradvertiserstoreachouttotheirtargetconsumergroupsNetEaseNetEasehasastrongbalancesheetwithamplecashtofunditsgrowinghasastrongbalancesheetwithamplecashtofunditsgrowinggamepipelineandportaldevelopmentgamepipelineandportaldevelopment35 Contact Us Contact UsIf you would like to request a video trailer or investor kit, please contact:If you would like to request a video trailer or investor kit, please contact: In China:In China:Li Jia (Liddy Li)NetEase.com,Inc.Email: liddylicorp.netease.comTelephone: (8610)82558208 In the United States:In the United States:Brandi PiacenteBrandi PiacenteThe Piacente Group, Inc.The Piacente Group, Inc.Email: Email: brandicorp.netease.comTelephone: (212) 481-2050Telephone: (212) 481-205036网聚人的力量网聚人的力量Power to the People