Netease looks to search engine for profit
(Xinhua)
Updated: 2004-03-24 11:04

Internet portal Netease.com holds that its search engine service will become a gold mine to sustain its profit growth, heralding an explosive profit.

Ding Lei, head of Netease, announced the business expansion for 2004 at a recent fair in Shanghai.

Netease, whose shares are traded on the NASDAQ, saw its revenue in 2003 more than double over the previous year, boosted by the strength in online gaming. But without the core technology of online gaming, China's top dotcom needs to seek a new growth point.

Ding said he eyes the search engine as he foresees that a spate of small and medium-sized enterprises will take to the Internet to create wealth in 2004 and they need to promote themselves by including their materials in the search index.

The rising demand is producing ever-bigger profits for search engine providers, noted Ding.

Ding said he considered the online search business an "evergreen tree" on the Internet, as it feeds people's need to locate information. He has been keeping track of the growth of online searching in China since 1997, and finally found the market entered a mature stage now.

Acknowledging that global search engines Google Inc. and Yahoo Inc. are already big players in China, Ding said that Netease could overcome them by its focus on and acquaintance with Chinese enterprises.

Netease forged a strategic alliance with Shanghai Hotsales Company Ltd. last week, authorizing the later to be the sole provider of the Netease search service in Shanghai.

Ding cited the example of Shanghai Hotsales to prove Netease's advantage. Hotsales has a staff of 300 people in East China, while the sales team of Google in China consists of no more than three persons.

Ding expected the search business could expand the company's income channels, but not immediately, citing the success of online gaming taking two years.

"We hope to start making a profit in two to three years," he said.

According to a report by market consulting firm Shanghai iResearch Co Ltd, China's search engine market will grow anywhere from 60 to 70 percent annually in the coming three years.

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