4th Q Conference Call Highlight

In a word, great quarter and horrible conference call. It just seems like the company management really doesn't want to be there.

The highlight:

- Effective tax rate for 2006 is 10%, expect to be in the low teens for 2007.

Online Game:

- 4Q06: XY2: 28% XYQ: 70% DT: 2%

- XY3 is going to be a pay-to-play game, the same price

- Anti-addiction system will affect all companies. Don’t see big impact.

Portal:

- weakness in 4Q is because NTES reduced the number of ads on its front page. They will increase the price per ad, but haven’t start it yet.

- Developing search engine. Open beta in 2Q. Search engine is developed with a junior partner (NTES 75% and partner has 25%)

- Cancel the travel, health, and culture channel. Looking for partners to run these channels. So to concentrate on the news and entertainment channel.

- The three big area is Email, Blog, and Contents. Feels like the technology is much better than their peers. Concentrate on integration.

- Video is part of the content. No specific plan right now.