Brandi Piacente – IR, The Anne McBride Company, Inc. Onward Choi – Acting CFO William Ding – CEO

Richard Ji – Morgan Stanley Wallace Cheung – Credit Suisse Dick Wei – JPMorgan (Asia Pacific) Ltd. Alicia Yap's – Citigroup Ming Zhao – Susquehanna Financial Group Eddie Leung – Bank of America/Merrill Lynch Tian Hou – Pali Capital Kathy Chen – Goldman Sachs

Good evening, ladies and gentlemen, thank you for standing by. Welcome to the NetEase second quarter fiscal 2009 earnings conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions) This conference is being recorded today, Wednesday, August 12, 2009. I would now like to turn the conference over to Brandi Piacente, Investor Relations for NetEase. Please go ahead.

Thank you, operator. Please note that the discussion today will contain forward-looking statements relating to future performance of the company and are intended to qualify for the Safe Harbor from liability as established by the US Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company’s control and could cause actual results to differ materially from those mentioned in today’s press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results are included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20-F. The company does not undertake any obligation to update this forward-looking information except as required by law. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the NetEase corporate website at corp.netease.com. I will now turn the conference call over to Onward Choi, Acting Chief Financial Officer, who will read the prepared remarks on behalf of Mr. William Ding, Chief Executive Officer of NetEase.

Thank you, Brandi. Total revenues for the second quarter of 2009 increased to $127.7 million compared to the $114.4 million in the prior quarter and $104.8 million in the second quarter of 2008. Revenues for our online games business totaled $114.4 million for the second quarter compared to $106 million in the first quarter and $87.1 million for the second quarter of 2008. The forefront of our online game business strategy has always been the ongoing in-house development and licensing of high-quality games that will continually diversify our user base. Our most significant developments in this area during the second quarter were with respect to our strategic licensing strategy and the much-anticipated re-launch of World of Warcraft in China. I will update on our progress. First, we completed technical support configurations and server rollout on schedule. Second, China's Ministry of Culture approved the content of the game and it is now under the approval process with the General Administration of Press and Publications or GAPP. Third, beta testing of the game began on July 30, 2009, and we're well prepared to start the commercial upon receiving the approval from GAPP. Altogether, we increased our technical and testing service staff by approximately 500 during the second quarter to support Blizzard Entertainment's Battle.net platform and the relaunch of World of Warcraft. For our portfolio of in-house developed games, new user statistics were particularly strong for Westward Journey II, Datang and New Fly for Fun during the second quarter. PCUs and ACUs for Westward Journey II were 591,000 and 207,000 in the second quarter respectively compared with 606,000 and 217,000 in the first quarter respectively. New registered users jumped 15% quarter over quarter and we recently released a new expansion pack for this game called aqua guy who the expansion pack called (inaudible). The expansion is currently in open beta testing with the official release on August 15. Fantasy Westward Journey continued its steady course through the second quarter. PCUs and ACUs were 1.7 million and 575,000 respectively compared with 1.75 million and 640,000 in the first quarter respectively. We have conducted a number overseas [ph] promotional activities vide diversified channels over the summer season so as to reinforce the long-standing popularity for Fantasy Westward Journey and promote its appeal to new gamers. Subsequent to the second quarter, we hit record of PCUs of 2.56 million on August 2. Our previous PCU record for Fantasy Westward Journey was 2.32 million achieved in August last year. For Tianxia II, we will launch a grand scale open beta marketing plan in September and release the new expansion pack in the third quarter. Our development team is currently working on further enhancing the game play design to increase player satisfaction and raise the confidence in spending. Tianxia II's development is proceeding according to our internal plan and we expect that this game's performance would be further strengthened following our upcoming marketing initiatives in September. We launched two new item games commercially during the second quarter, Buibui and TF Online. Buibui is a casual game offering players magic gun firing experiences, and TF online is a 3D game, offers star-war heroic role experiences. In May, we held a nation wide promotions for the open beta testing of new Fly for Fun, a number of promotional channels were deployed. And by the end of June, we gained over 3 million new registered users for new Fly for Fun, meeting our target performance statistics. We're also continuing to progress through closed beta testing of Heroes of the Tang Dynasty and continue to target the fourth quarter for commercial launch. Overall, this was an exciting quarter for our online games and game development. And as of June 30, we had approximately a thousand game developers supporting our ongoing game top line. We're continuing to focus on our core strengths to maintain our dominance in China's online game market and we look forward to a solid second half of the year as our newest licensed and in-house games come to market. Turning to advertising, revenues from advertising services were $10.7 million for the second quarter of 2009 compared to $6 million and $15.2 million for the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter improvement was due to improved advertising spending as a result of the domestic economic stimulus, this coupled with our effort to upgrade our product channels and add premium content resulted in better metrics in terms of both sales for our product and numbers of advertising customers. In terms of total revenue (inaudible) for the second quarter were automobiles, Internet and food and beverage. In terms of the percentage of revenue growth, it comes to finance, food and beverage and automobiles. We're continuing to work on adding great new content. We launched several new content channels offering education, scrabble [ph] and real estate in July and earlier this month. We also plan to launch a book search and review channels in September, which we expect, will be well-received. In search, the online desktop dictionary software total user downloads increased 50% over the first quarter, continuing the trend of steady growth in online usage over time. The online shopping search continues to gain acceptance and we're pleased with the user feedback today. As China's economy continues its path to recovery, we're expanding our sales force to enhance our industry and customer coverage, which we believe, will help us drive further advertising revenue growth during the next six months. That concludes Williams's remarks. Now I will provide a review of our second quarter 2009 financial results using numbers and percentages based on US dollars. In order to avoid repetitions with the press release, I will primarily focus on the discussions of margin and expense fluctuations along with net profit. Gross profit for the second quarter of 2009 was $101.3 million compared to $93.9 million and $105.8 million for the first quarter of 2009 and the second quarter of 2008 respectively. The quarter over quarter increase in gross profit was primarily attributable to the recognition of $12.2 million of revenue from the clean up of dormant accounts of online games in June 2009, partially offset by an increase in business test resulting from high revenue and increased staff related costs, resulting from increased head count in the second quarter of 2009. The recognition of revenue from dormant accounts of online games resulted from a change in our user agreement with online game players in May 2009 whereby outstanding points in accounts that remained dormant for a period of 540 day or more were removed after 30 days of our public notice issued on May 20, 2009. Going forward, we expect to recognize revenue related to the outstanding points removed from dormant accounts of online games on a quarterly basis. The year-over-year decrease in gross profit was primarily attributable to the receipt of a business tax refund of $21.5 million in June 2008 and increased cost of revenues in the second quarter of 2009 as a result of increased staff related costs resulting from increased headcount and increased business tax due to higher revenues in the second quarter of 2009, partially offset by increased game revenues in the second quarter of 2009. The increase in game revenue in the second quarter of 2001 was primarily due to revenue recognized from dormant accounts in June 2009 and as explained about an increased revenue from Westward Journey II and Tianxia II. Increased revenue from Westward Journey II was mainly due to enhanced game play introduced in the expansion pack released in August 2008. We reported a full second quarter revenue for Tianxia II in 2009 compared to only one month revenue for the second quarter of 2008, as the game entered a limited close beta testing on June 6, 2008. Gross profit margin for the online game business for the second quarter of 2009 was 88.3% compared to 90% and 91.2% for the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter and year-over-year decreases in gross profit margin were primarily due to increased staff related costs in the same quarter of 2009. Gross profit margin for the advertising business for the second quarter of 2009 was 16.6% compared to the gross loss margin of 13.1% and gross profit margins of 52.6% for the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter improvement in gross profit margin was primarily due to increased revenue brought about by certain economic stimulus measures implemented by the Chinese government in the past few months, especially with respect to the automobiles and electrical home appliances sectors. The year-over-year decrease in gross profit margin was primarily attributable to a significantly reduced advertisement revenues in the current quarter as demand for advertisement services remained relatively low with advertisers remaining cautious and still looking ahead for clear signs of economic recovery. Gross loss margins for the value added services and other business for the second quarter of 2009 was 23% compared to 22.3% for the preceding quarter and gross profit margins of 28.8% from the second quarter of 2008. The quarter over quarter increase in gross loss margin was primarily due to increased staff related forces and increased bandwidth and custody fees resulting from increased traffic. The year-over-year increase in gross loss margin was mainly attributable to the receipt of the business tax refund in June 2008 and increase staff related costs resulting from increased headcount in the second quarter of 2009. Total operating expenses for the second quarter of 2009 were $25.6 million compared to $22 million and $21.9 million for the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter increase in operating expenses was primarily due to a nationwide marketing cost for promoting the open beta testing of new Fly for Fun in May and June of 2009 and costs associated with other promotional activities, as well as increased research and development expenses resulting from increased software related costs. The year-over-year increase in salary and marketing expenses was mainly due to increased staff related costs resulting from increased salaries and pension levels and new headcounts in 2009 and increased marketing cost for promoting online games and advertising services in the current quarter. The year-over-year increase in general and administration expenses was mainly caused by increased provisions for bad debt resulting from an increase in the accounts receivables balance aged over six months as of June 30, 2009, and increases of its rental and property management fees resulting from increased office space in Beijing, China. Net profit for the second quarter of 2009 was $68.5 million compared to $61 million and $64.2 million for the preceding quarter and the second quarter of 2008 respectively. During the current quarter, we reported a net foreign exchange gain of $6.9 million and other net compared to losses of $7 million and $3.9 million for the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter and year-over-year decrease in foreign exchange loss was mainly due to the reversal of translation loss with respect to our euro denominated bank deposit balances as of June 30, 2009 as they changed the rate of euro against the RMB fluctuated over the period. We reported basic and diluted earnings per ADS of $0.53 each for the second quarter of 2009. This compares to basic and diluted earnings per share per ADS of $0.28 and $0.47 and $0.53 and $0.50 for the preceding quarter and the second quarter of 2008 respectively. We recorded income tax charge of $16.9 million, $9 million, and $20.5 million for the current quarter, the preceding quarter and the second quarter of 2008 respectively. The quarter over quarter increase in tax charge was primarily due to increased revenue in the second quarter of 2009 and the payment of the an extra cash charge of $5.6 million in June 2009 related to the tax assessments of 2008 and the first quarter of 2009 on one of our subsidiaries as explained below. The year-over-year decrease the cash charge was primarily due to the application of the statutory tax rate of 25% on the income of our subsidiaries in the second quarter of 2008 as approved by the preferred tax status of high/new technology enterprises was not received until December 2008. This subsidiary was both high and new technology enterprises and software enterprise status paid its corporate income tax at a rate of 12.5% for the first three quarters of 2008 while also understanding that it was granted high/new technology tax status in 2008. This subsidiary would be entitled to a preferential tax rate of 7.5% in 2008 based on the applications of the grandfather provisions under the corporate income tax law and the related implementation guidelines. The preferential tax rate of 7.5% was calculated by applying the 50% tax rate reduction for software enterprises against 15%, which is the preferred tax rate applicable to this subsidiary's high and new technology enterprises status. This subsidy was granted the high and new technology enterprises tax status in December 2008, the relevant local tax authority refunded the excess corporate income tax paid for the first three quarters of 2008 when applying the preferential tax rate of 7.5% in this quarter. Following issuance of a new tax circular by the state administration of taxations in April 2009, the local tax authority notified this subsidiary in June 2009 that we should pay its corporate income tax liability for 2008 and the first quarter of 2009 at a rate of 12.5% instead of 7.5%. this decision was based on the interpretations of the new circular issued by the state administration on taxations in April 2009 that the 50% tax rate reductions for software enterprises should be made again a uniform corporate income tax rate of 25% not the 15% preferred tax rate applicable to this subsidiary's high and new technology enterprises status. Cash flow generated from operating activities totaled $79.7 million for the second quarter of 2009 compared to a tax rate of $1 million and $75.2 million for the preceding quarter and the second quarter of 2008 respectively. In addition, the company has a restricted cash balance of $12 million. We maintained a very strong balance sheet with ample cash resources to fund our ongoing developments of world-class online games and premium online content and our third-party licensing arrangements. As of June 30, 2009, cash and time deposits totaled $909.4 million compared to $821.5 million as of December 31, 2008. As of June 30, 2009, we have spent in aggregate a total purchase considerations of approximately $13.1 million including transaction cost for our share repurchase program. Thank you for your attention. We will now be happy to take your questions. Operator, please go ahead.

Thank you, sir. We will now begin the question and answer session. (Operator instructions) The first question comes from the line of Richard Ji with Morgan Stanley. Please go ahead. Richard Ji – Morgan Stanley: Sure. Hi William, Onward, and congrats on a very strong quarter. I have two questions.

Hi. Richard Ji – Morgan Stanley: First starting with your online games and given you’re your company has one of the deepest pipeline in the industry and how would you balance the marketing initiatives for the various games given that you only have limited marketing resources? And also so far have you seen an intervening cannibalization for the gamers among your different games and also can you rank the expected ARPU for your new item-based games? Thank you.

Okay. Richard, I think regarding our first question, regarding our marketing initiatives to both games, I think basically we already have plans set aside to commence off with our marketing program and promotional activities in the coming quarters. And we believe that we do have ample resources to meet those plans that have already been scheduled. And there shouldn't be any big problems for us to promote our games. And of course there would be quite a number of new games of pipelines currently in the market that we're currently operating but still we would organize ourselves and try to make it in a smooth manner. And with regard to your second question regarding the cannibalization issues, I think basically from so far the games that we're currently operating, within the any office times or any issues regarding cannibalization, because we feel that different players would have different appetites in playing the game. And usually if they are playing a particular game, they would still continue their interest and expect to play those games and this wouldn't be a very big problem to us. Richard Ji – Morgan Stanley: Thank you. And my follow-up question is regarding your ARPU expectations and also ever since you started retailing World of Warcraft can you give us some color on what portion of the game comes from the older game of World of Warcraft. And also among the new gamers, have you been able to capture new gamers from other popular games in China?

Thank You. Richard, maybe I will translate this question regarding World of Warcraft into Chinese for William to add some color on. (Spoken in foreign language).

(Spoken in foreign language).

Okay. Maybe I will summarize William's remarks in English. Regarding the game itself, because the World of Warcraft is currently under the closed beta testing phase, and so we are not in a very good position to comment whether this how it compares with the performance as compared with the previous conditions. And basically for the current closed beta testing, most of the players would be those old players who have played games of World of Warcraft. And with regard to the expectations questions, because again World of Warcraft is a time based game and not an item-based game and so basically there would be a very hard limitations on the timeframe in terms of the revenue base. And so basically this definitely will not be a very comparable basis to compare the revenue contributions as compared with item-based games. But having said that, I think basically from the company's perspective, it was important to state how well we can deliver the product or services to our players and customers and make sure that they are actually satisfied with our games and this is what is more important than how much revenue going to contribute at the moment. Thank you. Richard Ji – Morgan Stanley: Thanks for the clarification. And again thanks.

Thank you. Our next question comes from the line of Wallace Cheung with Credit Suisse. Please go ahead. Wallace Cheung – Credit Suisse: Hi, good morning, William and Onward. I have got two questions. Number one is, regarding the dormant account cleanup, can you – I know it is not that easy, but can you identify like which particular games is more related to w World of Warcraft II or Fantasy Westward Journey and when we talk about going forward, there could be more cleanup of the accounts, so can we quantify the potential impact? And my second question would be regarding the advertising growth, I think it increased from – can you explain like what is the percentage of the advertising revenue generated from the e-mail related promotion services and are we going to see similar kind of growth trend in the course of time? Thank you.

Okay, thank you, Wallace. Regarding your first question, regarding the dormant account cleanup, I think basically this is a – for this quarter, this would be a one off cleanup to clear all those unconsumed points out there. Previously that had been accumulated so far. But with regard to how many of those would be diverted towards a particular games, I think basically the knowledge would be that because this would apply across all the games that we had operated so far. But it will – a significance amount of our revenue will be coming from the Fantasy Westward Journey and the Westward Journey II. I think basically this would be the lines for you to think about this. But I'm sorry that I am – there is not much that we can quantify for the time being about what would happen going forward because this very much depends on how the players behavior would be in the coming quarters, because we have already set up our rules and for those accounts that have been inactive for 540 days or more, we have already made the announcement, and making notice to the users and the players alike, and so we will have to wait to clean up those outstanding points as we see fit. And with regard to your second question about our advertising growth, in terms of the percentage of the revenue contribution from our email services or e-mail channels, basically the amount, the percentage will be around 25% of our advertising revenues will be coming from the e-mail content channels. And going ahead, with regard to our views about the Outlook of the advertising business for the rest of this year, what we will say is that given that there has been some economic stimulus measures being implemented by the local Chinese government, and there has been also – we have also seen some signs that the advertisers like getting more confidence in their spending, and so we feel positive about the development of the advertising business. And given the fact that the portal business has received a standard recognition, the effective and efficient means to promote and advertise the products or services, and so we still hold a positive will about the growth in this service of the business. Wallace Cheung – Credit Suisse: All right. Thank you, Onward. Just two quick follow-ups, so regarding dormant accounts cleanups, so is it the key reason behind the decline on the deferred revenue balance sheet item on Q and Q basis. Then the second question will be, on the advertising growth, is then the relationship with the maybe (inaudible) so because you mentioned that you have a lot of incentive and online dictionary downloads has been very good, so how is that contributing to advertising growth? Thank you.

Okay. Basically, I think from time to time, this is the company's management ongoing process to review our operations and see whether it is and at the right times to formalize and to organize our operations in a better manner. And so I think there is no direct correlations with whether that – because of the fact that some decline in our deferred revenues also or the game revenues and as such we would do this kind of thing. This is just an usual thing, and it just comes to the point that we consider it will be a good time to actually to organize ourselves and to cleanup those dormant accounts and to make it an ongoing process to manage our business better. And with regard to your second follow-up question regarding the advertising growth, at this stage, I think our search is still in our reinforcement development stage and the product itself has not yet come into commercialization, and so basically, our advertising revenue would basically be coming from traditional model advertising business. Wallace Cheung – Credit Suisse: Yes, thank you very much.

Thank you. Our next question comes from the line of Dick Wei, please go ahead. Dick Wei – JPMorgan: Two questions. First of all, first question is that just second half you have a couple more new games going to be launched like (inaudible) anyone of those games you expect to be like a big hit? And my second question is for the longer term plan, how many in-house games you plan to develop or launch a year? (Spoken in foreign language).

(Spoken in foreign language). Dick Wei – JPMorgan: (Spoken in foreign language).

(Spoken in foreign language). Dick Wei – JPMorgan: (Spoken in foreign language).

Perhaps I would summarize some highlights as made by William just now. Regarding Dick's first question regarding about our game launch in the second half of the year, basically there would be some web based games, 2.5D games, some 3-D games, regarding the Tianxia II and also the 3-D Q [ph] version games, and also we would have two casual games called the TF Online and (inaudible) Online games. And basically, our companies business strategy is that we will try to roll out and launch different kind of products to meet the different demands or needs in the market, but what is important is that we focused very much on the qualities of the games itself in order to make sure that you can really fit the needs and expectations of the gamers. And for all the games that we have launched so far, we would equally believe that they would be of the best qualities to meet the market needs. And for the second question about whether we have any special plans about the game launch for this year, I think from Williams remarks, basically our strategy is that we're not focusing on any specific numbers of games that we're going to launch in this year but rather we focus more on the quality that we are going to deliver to the market, because we believe that this is more important than the quantity of the games that we're going to roll out. Thank you.

Thank you. Our next question comes from the line of Alicia Yap with Citigroup. Please go ahead. Alicia Yap – Citigroup: Thank you. I have three questions. Number one, regarding your gross margins for online games, can you help us understand if the 26% sequential increase in the cost of revenue is mainly due to the new and additional cost, staff costs associated with operating World of Warcraft? And maybe can you explain whether you will start advertising the upfront license payment costs in 3Q, or you need to wait until you officially launch the game, then you will start incurring the amortization costs as part of your cost of services? And how should we be looking at gross margins for online games going forward, especially in the third quarter, as you're supporting the closed beta testing without adopting contribution?

Okay. I think basically, Alicia's questions will be surrounding our gross margin performance with regard to our online game business. And for the sequential growth in our cost of revenue, I think basically those will be attributed to the – our increased staff related costs and of course and there would be some related to our integration of our World of Warcraft staff as well. And in terms of the amortization of the license fees, I think basically it will happen as soon as we start of our commercial launch of the game, and there is no special time line. We will (inaudible) because you may well aware that the whole thing is still under progress and we are still awaiting the approval from the relevant government authorities. And with regard to the level of the gross margin profiles going forward, of course given that we would have the introductions of the license games to our overall game portfolios, this definitely would have a downward impact to our overall gross margins performance but at this rate I think basically we were still focusing on what we're currently doing in making sure that everything would be in place to make sure that the launch of the games would come as soon as possible. Alicia Yap – Citigroup: Thank you. And I have a follow-up in terms of your sales and marketing costs, what should we be expecting for the third quarter and fourth quarter as you are likely to increase your cost associated with the launch of the World of Warcraft and the promotion, and also increase your branding campaign on your advertising portal?

I think basically in the third quarter, of course, there would be more selling and marketing expenses that we're going to spend on to cater our various marketing programs and the launch of various games, and also for the business as well. Of course, but I think what we're seeing is that we would plan our resources and make sure that those spending would be made according to our schedules and plan and we do not have any particular numbers that we would say for the time being but definitely more this kind of expenses would happen in the first quarter. Alicia Yap – Citigroup: Okay, and then thank you. And then lastly, regarding the Wrath of the Lich King, have you submitted the content for government review, and we do expect that will be likely be launched? Thank you.

Maybe I'll translate your question in Chinese and maybe William can add some color on this. (Spoken in foreign language).

(Spoken in foreign language).

Okay, Alicia.

(Spoken in foreign language). Alicia Yap – Citigroup: (Spoken in foreign language).

Okay. And so basically, this is very concise and that is basically everything would be based on our notice. As soon as we get any new updates, we will then notice everyone accordingly.

Thank you. Our next question comes from the line of Ming Zhao with SIG. Please go ahead. Ming Zhao – Susquehanna Financial Group: Well, thank you for taking my question. Good morning, William and Onward. I just have a quick question on Fantasy Westward Journey, it seems there is still some weakness in the second quarter, could you tell us whether that weakness is mostly due to seasonality? And into the summer seasons, we have heard that the big numbers in PCU you just mentioned, should we expect this game to perform better in the third quarter? (Spoken in foreign language).

(Spoken in foreign language).

Basically a quick recap, basically the relatively low performance of Fantasy Westward Journey in the second quarter is mainly due to the seasonality issues. But going forward, especially in the first quarter, we would definitely increase more game play and the content of this game to making sure that the gamers would have more to play in this game. Ming Zhao – Susquehanna Financial Group: Well, thank you.

Thank you. Our next question comes from the line of Eddie Leung with Bank of America/Merrill Lynch. Please go ahead. Eddie Leung – Bank of America/Merrill Lynch: Good morning, William and Onward. I have a few questions. The first one is related to the reconciliation of dormant accounts as well, did you guys recognize any costs related to this dormant accounts in the second quarter, or all revenues basically dropping to the bottom line?

Yes. Eddie Leung – Bank of America/Merrill Lynch: Hello?

Hello? Eddie, can you hear me? Basically you're right in saying that all the related costs will be going below the lines. Eddie Leung – Bank of America/Merrill Lynch: Okay, got that. And the second question is on the pipeline of some of your major expansion packs for Fantasy Westward Journey as well as WWII, could you give us an update on the potential launch dates of the expansion packs?

I think – sure, of course. For the expansion packs for the Fantasy Westward Journey, I think basically this would definitely come out in the second half of this year, may be in the fourth [ph] quarter. And for the Westward Journey II, we already have one called the (inaudible) currently in the testing phase, and we're going to release this expansion pack on the August 15th. Eddie Leung – Bank of America/Merrill Lynch: Got that. And my final question is about your licensing strategy, do you plan to work with other overseas developers besides Blizzard?

Of course. I think basically with regard to the company's licensing strategies, the company is always open – holds an open attitude in exploring potential and probable opportunities. But of course this very much depends on whether we can find out some things that we would actually think are of good quality and good reputation and also everything would be in aligned with all the parties consensus and agreements. Eddie Leung – Bank of America/Merrill Lynch: Understood, thanks.

Thank you. Our next question comes from the line of Tian Hou with Pali Capital. Please go ahead. Tian Hou – Pali Capital: William and Onward, I have several questions, the first question is regarding this 12.2 million dormant account revenue recognition and can you know give some color on how far back have you – you know when you clean the accounts, those accounts opened how far back, is that five years ago, and you know, just give the time line so you know I can have a better picture on that? So that is the first question. I will follow up on the second and third.

Okay. With regard to your first question, regarding the dormant accounts, I think the timelines would be – date back to from the very beginnings, and there is no particular cut off point or whether, on the starting timelines of this, but from the very beginning. Tian Hou – Pali Capital: Oh, I see. Okay, good, I got it. The second question is in your costs and expense and have you incorporated the costs and expense related to the operation, the future operation of World of Warcraft? And if so how much, can you give us some details?

Definitely. For the current quarter there would be some costs and expenses that we have already incurred or spent later to in preparations of our coming launch of the World of Warcraft. But for the time being, I think what we will say is that we have to spend money on the procurements on the surface, that needs to be required to service the operations of the game itself. And also, we also have incurred some license fees that have to pay to the business side [ph]. And also we have also during the second quarter we have also recruited more technical and customer service staff in preparations to service this game. Tian Hou – Pali Capital: So I guess just so I am clear, so you are saying, not only you have a staffing cost the high tech account, also you have a depreciation licensing fee and technical support expense? Is that right? In the second quarter?

I think basically if you're talking about being the depreciation expenses because those would only be happen in the second quarter, so I think that is not much that would happen so far, but for the time being, I think basically what we have spent was basically some CapEx on the servers and some license fees and also some staff cost including our service teams. Tian Hou – Pali Capital: Okay, so the question (inaudible) going forward, you probably come up World of Warcraft and you will have a revenue, and so going forward, I think we need some direction in terms of how we are able to model, how are we going to do the model. Are you going to have a lump sum revenues you know like Fantasy Westward Journey and World of Warcraft together, and so that is the cost and expansion, or are we going to have a separate line of World of Warcraft? So which direction we should go, how should we model?

I think basically, this is something the companies would be working on for the time being and we would update you as soon as we have a better position to let you know about it. Tian Hou – Pali Capital: Okay. So last question is, you have 900 million cash. Every quarter, we saw the fluctuation in your exchange gains and losses, and so I just wonder if you guys think about any better way to use your cash?

Sure, of course. Just as what we have always been highlighting, I think basically for those cash balances that we have so far, there would be a couple of days that we will be considering, including potential share buybacks and some operations opportunities, and also some new to build up a stronger business, say for example, our current (inaudible) business that we have currently in [inaudible] in order to strengthen our competitive edge in this respect. And so I think basically that there will still be many areas that the company will be always looking into and considering seriously whether to – how to use our cash in a every effective manner. Tian Hou – Pali Capital: Thank you. Very helpful.

Thank you. Our next question comes from the line of Kathy Chen with Goldman Sachs. Please go ahead. Kathy Chen – Goldman Sachs: 0Thanks for the call. I just have one follow question again on Fantasy Westward Journey trends during the quarter. If I look at the numbers correctly, it looks like the ACUs were down about 8% year on year during the quarter, and this is the first time that we have seen a year on year decline. So I mean I understand earlier you said there is some seasonality impacts here but I would like to get a little more color on what other trends are going on, because it looks like it might not just be seasonality? Thank you.

Basically, I think seasonality is definitely one of the reasons that is attributed to the relatively low ACUs performance that we have seen for the second quarter. Because we would traditionally for the second quarter, there would be less holidays in there, and also it would always be the exam seasons, and for most of our gamers, the age group will be relatively lower, which means that most of them would still be pending school. And so at this time frame, basically, they won't be able to spend much time playing those games. And also just as what William has just highlighted as well, for the – in the coming quarters, we definitely would introduce more game play and content in the games to make sure that there would be more fun and more stuff for the players to play on and to spend and also in the coming third quarter. We would also carry out more marketing and promotion activities and to the further promote our games. And given the fact that in August 2 of this year, the game itself also made another new record in terms of the PCUs numbers, which is very encouraging. And also in some ways also makes us believe that our game is also very popular amongst the gamers world and also they are still very – feel very interested to play our games and stick to our games as well. Kathy Chen – Goldman Sachs: Okay. Thank you. And just to clarify on the seasonality comment, actually the decline is on a year on year basis, so should be similar seasonal impact for your first numbers, right?

I think basically I think still basically this is an anomaly that is attributed to the regions of the (inaudible). If you're talking about the year over year patterns and perhaps other things that we will add on, maybe that you will appreciate that in terms of the online gaming business or the industry alike. Generally, the competition is getting more and more intense, and basically what we've would see self it would create a more challenging task for each of those place in this market to getting more new players of the games, but so far, of course this would be an issue to all players across the industry, but the most important is that we see that our existing players in our games or the older gamers are still very happy playing our games, because of the content of the games, because of the services, the qualities and the game playing, everything that we've have already offered in this game, and the reputation as well. And so we will believe that going forward there would be possibly room for us to further build the momentum of this game. Another remark is that I would also like to repeat is that you would see that in August 2 this year we would also have made another new hit on the PCU numbers which is a very encouraging information to prove that this game is very popular amongst the gamers. Kathy Chen – Goldman Sachs: Okay, thank you.

Thank you. Ladies and gentlemen, that is all the time that we have for questions. I would like to turn the call back over to Brandi Piacente, please go ahead.

Thank you once again for joining us today. Please feel free to contact us if you have further questions. Have a good day.

Ladies and gentlemen, this concludes the NetEase second quarter fiscal 2009 earnings conference call. If you would like to listen to a replay of today's conference, please dial 1-303-590-3030 or 1-800-406-7325 and enter the access code 411-8093. Those numbers again are 303-590-3030 or 1-800-406-7325 and the access code is 4118093. We would like to thank you for your participation. You may now disconnect.