(Beijing – November 2, 2009) NetEase.com, Inc. (NASDAQ: NTES), one of China’s leading Internet and online game services providers, today announced that the General Administration of Press and Publication (“GAPP”) of the PRC government has posted on its official website a statement that the current operation of the World of Warcraft® in China by NetEase’s affiliated company, Shanghai EaseNet Network Technology Limited (“Shanghai EaseNet”), is being conducted without proper approval from GAPP. The statement further indicates that GAPP is returning Shanghai EaseNet’s application for approval and Shanghai EaseNet should suspend charging users to play the game and not allow new account registrations. GAPP also notes in its statement that it is evaluating whether to impose administrative penalties on Shanghai EaseNet. As of the time of this press release, neither NetEase nor Shanghai EaseNet has been officially notified of GAPP’s determination. Shanghai EaseNet licenses World of Warcraft®, a massively multi-player online role-playing game, for operation in China from Blizzard Entertainment, Inc.
NetEase and Shanghai EaseNet believe that they are in full compliance with applicable PRC laws and are currently seeking clarification from the relevant governmental authorities regarding this statement by GAPP. NetEase will provide further updates on the statement by GAPP as appropriate.
NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase’s online communities and personalized premium services have established a large and stable user base for the NetEase websites which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia II and Datang, as well as the licensed game World of Warcraft®.
NetEase also offers online advertising on its websites which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the Web which are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
Other community services which the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. NetEase is also the largest provider of free email services in China. Furthermore, the NetEase websites provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.
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This press release contains statements of a forward-looking nature. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that Shanghai EaseNet will not be able to continue operating World of Warcraft® or other games licensed by it for a period of time or permanently due to the position of GAPP or other governmental actions; the risk that Shanghai EaseNet or NetEase will be subject to penalties or operating restrictions imposed by governmental authorities in the PRC resulting from the operations of their online games, including suspension of their Internet service or other penalties; and other risks outlined in NetEase’s filings with the Securities and Exchange Commission. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.
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