Chinese Internet portal NetEase.com (NTES) has reported its unaudited financial results for the quarter ended March 31, 2007.

Total revenues for the first quarter of 2007 were CNY554.6 million, compared to CNY540.3 million and CNY529.8 million for the fourth and first quarters of 2006, respectively. Revenues from online games were CNY481.9 million for the first quarter of 2007, compared to CNY451.6 million and CNY450.6 million for the fourth and first quarters of 2006, respectively. Revenues from advertising services were CNY56.2 million for the first quarter of 2007, compared to CNY72.1million and CNY61.6 million for the fourth and first quarters of 2006, respectively. Revenues from wireless value-added services and others dipped a little to CNY16.6 million for the first quarter of 2007 and the fourth quarter of 2006, compared to CNY17.6 million for the first quarter of 2006.

William Ding, CEO and director of NetEase said, "Fantasy Westward Journey's record PCU during the first quarter, driven in part by major weekend events and the Chinese Valentine's Day holiday, is a strong indicator of the popularity and long lifecycle of this game. We continue to have positive expectations for Fantasy Westward Journey and plan to release an expansion pack in the second half of the year to capitalize on this game's momentum. In addition, Westward Journey III, the upgraded version of Westward Journey Online II entered internal closed beta testing on May 20, 2007. We are confident in our ability to migrate the existing players to the upgraded version and will launch our marketing campaign concurrent with the internal closed beta. Clearly, we were not satisfied with the results of the open beta testing for Tianxia II in March. We are therefore delaying the commercial launch to allow time to correct certain design issues that will gear the game toward a broader audience of both experienced gamers and beginners."

Gross profit for the first quarter of 2007 was CNY430.1 million, compared to CNY456.7 million and CNY420.8 million for the fourth and first quarters of 2006, respectively. Gross margin for the online game business for the first quarter of 2007 was 89.6%, compared to 90.3% and 90.4% for the fourth and first quarters of 2006, respectively.

Total operating expenses for the first quarter of 2007 were CNY117.7 million, compared to CNY123.9 million and CNY113.5 million for the fourth and first quarters of 2006, respectively.

Net profit for the first quarter of 2007 totaled CNY301.5 million, compared to CNY320.2 million and CNY293.7 million for the fourth and first quarters of 2006, respectively.

As of March 31, 2007, the company's total cash and time deposit balance was CNY4.0 billion, compared to CNY3.9 billion and CNY3.8 billion as of December 31, 2006 and March 31, 2006, respectively.