Netease Corporation (Nasdaq: NTES), controller of one of the four major portal websites in China, announced on Friday in Beijing that it had gained a net profit of 116 million U.S. dollars in 2005, up 111.1 percent on 2004.

In its 2005 financial report released on Friday, Netease attributes its flying profits to online games, saying that last year two online games, developed by Netease, reaped an income of 171 million U.S. dollars, more than 80 percent of the corporation's gross income.

Apart from online games, advertising revenues also hit a new high in 2005 at 29.9 million U.S. dollars, increasing by 41 percent.

"The rise of the online advertising market, combined with the adjustments of the website's contents, has prompted the rise of advertising for Netease," the corporation said in its report.

Similar to that of SINA corporation, Netease's gross margin of mobile value-added service last year has witnessed a sharp drop, which was primarily the result of fierce competition on the mobile value-added service, said Netease, noting that the corporation has reduced its focus on this sector.

The achievements in 2005 were "beyond our expectations," the corporation said. "The website contributed a lot to the marketing of its own online games and Netease will take cautious adjustments as China's online games market is growing," said Ding Lei, CEO of Netease.

He said that the corporation will market new online games in 2006, while keeping the two existing ones.

Netease will press on with the development of new online games, said Dong Ruibao, chief operator of the corporation, adding that the corporation will provide an online recreation platform in 2006 as well as several new online games.

Source: Xinhua