NetEase.com Inc., ADS (NASDAQ:NTES) trades in the $20 range and is one of China’s premier subscriber Internet communities. It operates in four segments: Online Game Services, Web Portals and Websites, Advertising Services, and Wireless Value-added Services. NTES employs approximately 2,400 employees, was founded in 1997 and is based in Beijing.

The Online Game Services segment develops and operates MMORPGs, the massively multi-player online role-playing games that are played on the Internet in virtual worlds that exist on networked game servers to which various players connect and interact; online casual game platforms with various multi-player games; and Tianxia II, an item-based online game.

NTES uses a point card system of debits and credits and distributes its point cards to gamers through wholesalers, Internet cafes, software stores, supermarkets, bookstores, newspaper stands, and convenience stores.

These people have online gamers wired!

The NTES Web portals and Websites segments provide Internet users with Chinese language online services related to content, including information and online entertainment through various channels focusing on news, entertainment, sports, finance, information technology, and automobiles; and community and communication services, including e-mail, blogging, photos, instant messaging, matchmaking, alumni directories, clubs, e-cards, chat rooms, and community forums. Its Websites also provide a Website directory; Web pages search service; and an Internet search engine called Yodao.

The Advertising Services segment engages in animated and interactive banner advertising, channel sponsorships, direct e-mail, floating buttons, text-links, interactive media-rich sites, sponsored special events, games, contests, and other activities to conduct integrated marketing campaigns.

The Wireless Value-added Services and Others segment allow users to receive news and other information, such as stock quotes and e-mails, download ringtones and logos for their mobile phones, and participate in matchmaking communities.

In September, the NTES board approved the repurchase of up to $100 million of its U.S.-listed shares over the next year. NTES recently completed buying $46.4 million in shares under a program started in July 2007. A company typically buys its own shares when it thinks the market is undervaluing the stock and to show management confidence in the company.

And the numbers from the 2nd quarter ended June 30, are pretty impressive; NTES reported earnings of $63.9 million, or 49 cents per American Depositary Share, compared with $45.6 million, or 34 cents per ADS in the year-ago quarter. The company's revenue rose to $104.4 million from $81.3 million, helped by increases in online game services and advertising services revenues. Analysts polled by Thomson Financial were expecting a profit of 39 cents per share on $99 million in revenue. NTES beat the mean average of the analysts and that’s always, always, always a good sign.

ExHippy