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NetEase profit dips on advertising fall

CHINA'S second-largest online game provider NetEase Inc saw lower-than-expected profit in the third quarter, with a drop in online advertising and rising operating costs for the "World of Warcraft" game.

Profit rose 26 percent from a year ago but lowered 16 percent from the previous quarter to 393.8 million yuan (US$57.6 million), or 3.02 yuan per share, the company said today.

Total revenue was up 10 percent year on year to 879.4 million yuan and online games generated 775.1 million yuan, down 15 percent from a year ago.

NetEase won the license to run "World of Warcraft" from Activision Blizzard Inc in China's mainland in April from rival The9 Ltd.

China has banned direct foreign investment in its lucrative online games industry in an effort to tighten control over its virtual worlds. The game resumed commercial operation on September 19 after being halted for three months waiting for regulatory approval. The company also owns the license to run Activision's "StarCraft II", hoping to generate more income apart from its self-designed games.
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