Internet portals hold the key to expansion for Chinese Internet company NetEase.com Inc this year, chief architect Ding Lei said Thursday.

Ding, who founded NetEase in 1997, has focused on developing online games and e-mail systems over the past two years, and has seen his firm become one of the biggest online games operators and most profitable Internet companies in the country.

But this year he will turn his attention to Internet portals.

"We have huge potential in online advertising," said Ding, the richest man in China in 2003 and the sixth richest in 2004, according to US magazine Forbes.

"The reason that we lag behind our competitors is we did not make good use of our advertising resources," he said.

NASDAQ-listed NetEase collected 66 percent of its US$115.78 million revenue in 2004 from online games, while online advertising revenue contributed 18 percent to the total.

Jim Sun, an analyst at London-headquartered Evolution Securities, pointed out that although NetEase has clear-cut advantages over other online games operators such as an efficient billing model to curb pirate servers, strong in-house development capabilities, and less violent games heavy reliance on online games is risky.

Ding said that he will watch over the development of NetEase's Internet content business this year and increase investment in the area.

The company also formed a strategic partnership with the most famous Chinese sports brand Lining yesterday.

The sports channel on the NetEase website will be called Lining Sports Channel.

However, Wendy Foo, senior vice-president for sales and marketing at NetEase, said the co-operation will be more than merely sponsorship.

Lining will also contribute its resources, including its official sponsorship of the Chinese national diving, table tennis, gymnastics, and shooting teams, the US National Basketball Association, and other sports events to increase coverage of those popular sports.

NetEase will also open an online shopping mall for Lining to sell sports goods.

NetEase announced last Friday that it will partner NASDAQ-listed financial information website China Finance Online to strengthen the width and depth of its website content.

It has also formed an alliance with Soufun.com, one of the most popular property information websites in the country.

Property, financial information and sports news are the three categories of content that attract most attention from Internet surfers, so they are also targeted by advertisers.

Ding said his company will adopt a focused strategy and will not seek to invest heavily in the 19 channels that NetEase has already developed.

He added his company has made great gains in search engine-related advertising, and will continue to pursue this avenue.

NetEase struck a deal with United States search giant Google last year, providing search services to customers on that basis.

(China Daily April 8, 2005)