Chinese Internet portal Netease.com (NTES) reported its unaudited financial results for the second quarter ended June 30, 2006.

Netease's total revenues increased to CNY575.3 million for the second quarter of 2006, representing 8.6% growth from CNY529.8 million for the first quarter of 2006, and 38.0% growth from CNY416.9 million for the second quarter of 2005.

Online game revenues increased to CNY486.0 million for the second quarter of 2006 representing a 7.9% increase over CNY450.6 million for the first quarter of 2006 and a 41.4% increase over CNY343.7 million for the second quarter of 2005. Revenues from advertising services increased 11.7% to CNY68.8 million from CNY61.6 million for the first quarter of 2006. Advertising services revenues increased 28.7% over CNY53.4 million for the second quarter of 2005.

GAAP gross profit for the second quarter of 2006 was CNY457.4 million. Total GAAP gross margin for the company for the second quarter of 2006 was 82.8%.

Total GAAP operating expenses for the second quarter of 2006 were CNY134.3 million.

As of June 30, 2006, the Company's total cash and time deposit balance was CNY3.6 billion, a decrease of 4.1% from CNY3.8 billion at March 31, 2006, primarily due to the utilization of approximately US$50.3 million for the repurchase of certain of the company's issued and outstanding ADSs.