Born in 1971 in Ningbo, Ding Lei showed so little talent at school that his teacher blamed him for “hindering the whole class”. He blossomed late, and got into a top technical university in Chengdu. However, bored by his course on microwave communication, he cut classes and attended lectures on computing instead. On graduation in 1993 he worked for the Ningbo Telecommunications Bureau.
Against strong opposition from his family, he soon quit this job and moved to Guangzhou. He made friends with Tencent founder, Ma Huateng (see WiC37, Who’s Hu) with whom he discussed the prospects of the internet. He founded NetEase in 1997 in an eight square metre office without air-conditioning. Originally it sold email software.
By 2000 web portals like Yahoo! were becoming active in China and Ding decided to sink his software earnings into building one. He moved the company to Beijing and listed on Nasdaq. However, tensions quickly rose as the Nasdaq crashed and Ding’s co-founders left. The advertising business model wasn’t working and he became depressed. In 2001 NetEase was suspended by Nasdaq after failing to submit an accurate financial report. Ding considered selling the company, and was offered $85 million.
Tom Hanks may find this hard to believe, but according to Southern People Weekly, Ding reinvented himself after watching Forrest Gump five times in a row. He was also helped by a timely investment from Duan Yongping (WiC49, Who’s Hu). And when China Mobile came up with a new revenue sharing model that allowed websites to take a slice of SMS profits, Ding was suddenly able to monetise his user base. On January 2, 2002 NetEase resumed trading on Nasdaq. Less than two years later it was trading 108 times higher than its low point.
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Southern People Weekly comments that Ding went “from heaven to hell” in two years, and by the age of 32 was named China’s richest man. He further expanded the business by building and operating online games. Rising ad revenues also boosted earnings. NetEase made a net profit of Rmb1.9 billion in 2009.
NetEase was recently in a regulatory spat (see WiC38) that briefly stopped it operating the popular online game World of Warcraft.
Ding ranked 29 in the 2009 Hurun rich list with assets of Rmb19 billion. He is a great believer in the merits of Chinese traditional medicine, and a follower of medicine master, Deng Tietao.
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