NetEase to boost investment in mobile

NetEase Inc, a major Internet portal operator in China, plans to invest heavily in mobile Web services, said a senior company official, as companies are rushing to secure a position in the rising sector.

NetEase's mobile Internet display at the Beijing International Telecommunications Exhibition in September. The company generates nearly 90 percent of its revenue from Web games. [Photo/China Daily]

William Ding, NetEase's chief executive officer and director, said the first half of the year will see the launch of a full portfolio of mobile Internet services.

The company has offered a number of services for mobile devices for some time, including a dictionary, news and a note-taking application, as an increasing number of people turn to mobile devices to access the Web.

Last year, the company spent 718.3 million yuan ($115.2 million) on research and development, an increase of 54.3 percent year-on-year. Ding didn't disclose the amount the company plans to spend this year.

However, "mobile Internet services are not likely to contribute a lot to total revenue" in the near future, Ding said on Thursday during a conference call.

Most of China's Internet companies have seen mobile traffic rise quickly as 420 million people, or 74.5 percent of the country's total Internet users, accessed the Web via mobile devices at the end of December.

However, few companies have been able to translate that traffic into considerable revenue as they are still looking for ways to make money from those services, while providing a good user experience.

"Although NetEase hasn't come up with a product as popular as Sina Weibo or WeChat for the mobile Internet, the prospects for the company are good in general, considering its advantages on the desktop sector," said Chen Zhengyu, a stock analyst with China Merchants Securities (HK) Co Ltd.

NetEase is the operator of 163.com, a popular Chinese Web portal.

Sina Corp's micro-blogging service Sina Weibo and Tencent Holdings Ltd's instant chatting service WeChat are regarded as the two products most likely to give the companies the upper hand in the mobile sector, where there are still no clear leaders compared with the desktop field.

NetEase, which is also China's second-largest online games operator, generates nearly 90 percent of its revenue from Web games, including revenue from operating Blizzard Entertainment Inc's hit game World of Warcraft.

Ding said the company hopes to have more regular launches of new expansion packs for World of Warcraft to attract new users.

In 2012, the company reported revenue of 8.4 billion yuan, up 12 percent year-on-year. Its net income grew 12.5 percent to 3.6 billion yuan.

chenlimin@chinadaily.com.cn