NetEase.com, Inc. Announces Strong Second Quarter 2000 Financial Results Beijing, July, 30, 2000 102.5% Revenue Growth from Prior Quarter; Total Registered Users Exceeded 5.9 Million; Average Daily Page Views Reached 24 Million; Solid Cash Position The amounts set forth in this press release are based upon the exchange rate of U.S. $1.00 = 8.278 Chinese renminbi (RMB) BEIJING, July 30 -- NetEase.com, Inc. (NASDAQ: NTES - news), a leading China-based Internet technology company which pioneered the development of applications, services and other technologies for the Chinese market, announced today its financial results for the quarter ended June 30, 2000. NetEase.com, Inc. reported total revenues of RMB14.4 million (or US$1.7 million) for the quarter ended June 30, 2000, a 509.0% increase over total revenues of RMB2.4 million (or US$0.3 million) for the corresponding period in 1999 and a 102.5% increase over total revenues of RMB7.1 million (or US$0.9 million) for the quarter ended March 31, 2000. On June 29, 2000, the Company commenced its initial public offering of 4.5 million American Depository Shares (``ADSs'') on NASDAQ at US$15.50 per ADS. Net proceeds from the offering were approximately US$62.6 million, which are expected to be used principally in the areas of marketing, research and development, content development, acquisition of additional servers and bandwidth, and business development purposes. With the proceeds from the offering,the Company's pro forma cash balance as at June 30, 2000 was RMB857.9 million (US$103.5 million).   ``This is our first earnings announcement as a public company, and we are very pleased with our results. Our performance successfully demonstrates our leading position in China's Internet market and our strong execution ability,'' said King Lai, Chief Executive Officer of NetEase.com, Inc. ``We achieved impressive growth in both our advertising services revenue as well as our e-commerce services revenue, building on our operating momentum and affirming the strength of our focused business model.''   Advertising services revenue for the quarter ended June 30, 2000 was RMB12.4 million (or US$1.5 million), representing a 1963.2% increase over revenue of RMB0.6 million (or US$72,511) for the corresponding period in 1999; an 87.5% increase over the last quarter's revenue of RMB6.6 million (or US$0.8 million). The increase in advertising revenue was due primarily to the increase in number of advertisers purchasing space on the NetEase Web sites as well as larger purchases by certain advertisers. No one customer accounted for 10% or more of net revenues during the quarter ended June 30, 2000.   E-commerce related services revenue for the quarter ended June 30, 2000 was RMB1.9 million (or US$0.2 million), representing an increase of 402.1% over the last quarter's revenue of RMB0.4 million (or US$44,726). There was no e-commerce related services revenue for the corresponding period in 1999. The increase in e-commerce related services revenue was primarily due to the introduction of e-commerce services in July 1999 and the growth of e-commerce commercial relationships and sponsorships.   The Company recorded a net loss of RMB27.1 million (or US$3.3 million) for the quarter ended June 30, 2000, or a pro forma net loss of US$0.12 per ADS, after giving effect to the conversion of our outstanding preference shares into ordinary shares. The Company recorded net income of RMB0.8 million (or US$0.1 million) and a net loss of RMB23.9 million (or US$2.9 million) for the corresponding period in 1999 and for the quarter ended March 31, 2000, respectively. Average net cash burn rate (net cash operating expense plus capital expenditure) per month for the quarter was RMB10.1 million (or US$1.2 million).   The average daily page views on the NetEase Web sites for the seven-day period ended June 30, 2000 increased to 24.0 million, a 64.4% increase from 14.6 million for the last week of March 2000 and a 20.0% increase from the average daily page views of 20.0 million for the last week of May 2000. Additionally, the Company had over 5.9 million registered members at the end of June 2000, a 73.5% increase from 3.4 million at the end of March 2000 and a 20.4% increase from 4.9 million at the end of May 2000.   ``The explosive growth of our registered user base and daily page views demonstrates that NetEase has one of the fastest growing Internet operations in mainland China. More importantly, we are able to continue to achieve this level of growth with a healthy cash burn rate. The continued increase of advertisers and e-commerce vendors attracted to our network demonstrates the success of NetEase's business strategy. We strongly believe that we are well positioned to capitalize on the future potential of China's Internet market,'' stated Ms. Susan Chen, Chief Operating Officer of NetEase.com, Inc.   During the quarter, NetEase continued to develop strategic relationships in the area of wireless Internet service, broadband Internet service and content. In the area of WAP, NetEase formalized its business agreement with Siemens, one of the world's largest mobile phone manufacturers, under which NetEase's WAP portal, wap.163.com, will, for a six-month period that begin in July 2000, be pre-configured into the bookmark list for the WAP enabled mobile phones currently manufactured by Siemens for the China market. In addition, NetEase also developed communication features between WAP users, ICQ users and Odigo users. In the area of broadband Internet service, our affiliate, Guangzhou NetEase, recently entered into a relationship with ChinaCast Co. Ltd. ChinaCast offers broadband Internet access in China by providing downstream data transmission through its own VSAT platform and leveraging ChinaNet's service to provide upstream data transmission. This arrangement will enable NetEase to offer its existing and future Internet services through ChinaCast's Turbo163 service. In the area of content, NetEase recently entered into a content agreement with Petit Fute, a French company that has been providing global travel guide information for the past 24 years and has expanded into offering online travel guide through www.petitfute.com since 1997. Under this agreement, NetEase will have access to the Chinese version of Petit Fute's online traveling guide.   ``We are committed to being the No. 1 player in China. We expect to drive our revenue growth by capitalizing on the explosive growth of our online traffic. We are confident that with our management team and our talented staff, we will create value for our shareholders.'' Mr. Lai added.   About NetEase.com, Inc.   NetEase is a leading Internet technology company based in China. The NetEase Web sites offer Chinese Internet users Chinese language-based online content, community and electronic commerce services. NetEase's average daily page views for the seven-day period ending June 30, 2000 exceeded 24 million. As of June 30, 2000, NetEase Web sites had more than 5.9 million registered members, 465,000 personal home pages, 34,000 simultaneous chat room participants, and 3.6 million e-mail accounts.   Disclosure Regarding Forward-Looking Statements:   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 expressions. 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 the number of Chinese users of the Internet will not grow; the risk that the NetEase Web sites will not be attractive to Chinese Internet users as NetEase anticipates; the risk that NetEase's planned advertising campaign will not be successful; and other risks outlined in NetEase's filings with the Securities and Exchange Commission, including its registration statement on Form F-1, as amended. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.   For Further Information, please contact:   Zhou Ping, NetEase.com, Inc. Tel: (8610) 65618811-217 E-mail: pingzhou@staff.163.com   Note: NetEase Web Properties include www.yeah.net, www.126.com and the number one site, www.163.com.