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Date: July 13, 15

Introduction

NetEase, Inc is an internet company based in China that runs 163.com, which is a popular website as ranked by Alexa. It is currently the largest internet content and service provider in China and regularly makes the top 10 of used domains in spam. Since its founding in1997, the company has tremendously grown due to its huge investment especially in the search engine technology and online gaming. The company’s market value stands at approximately 7.8 billion US dollars and currently has a staff of over 6, 000 employed persons. The English name of the company was changed to NetEase, Inc from NetEase.com in March of 2012.

Chevron Corporation is cross border American Energy Corporation with Its headquarters in California and its operations are spread across 180 countries. The company is involved in every part of gas, geothermal and gas energy industries, which includes the production, marketing, refining, transport, exploration, power generation and chemicals manufacturing and sales. It came 3rd in the list of the top 500 corporations in the US as ranked by Fortune 500 and 16th on the global top 500 list worldwide. The downstream operations of Chevron sell and manufacture lubricants, fuels, petrochemicals and additives products. Its most significant operation areas are the North American west coast, the Gulf Coast of the US, Africa, Australia and the South East Asia.

Of the two companies, NetEase, Inc appears to be best placed to experience huge financial returns as compared to Chevron, Inc. the two companies are involved in very different fields of interest, whereas NetEase is involved hugely in the internet service provision, Chevron is involved with the energy sector. Since NetEase, Inc is an online based company, its marketing capabilities are immense as compared to Chevron. This is a big advantage as it allows the company through the online platform to easily and efficiently reach its potential customers giving NetEase a huge potential of its market growth unlike Chevron. This is true because the internet community is ever growing and its accessibility is becoming easier and cheaper throughout the world.

Online based companies are also less prone to price fluctuations which are not the same with the energy sector due to possible political instability in most parts of the world, war and economic inflation. These factors make it highly impossible for an individual to approximately predict or anticipate the future standing of the company’s financial stability. Many of the young generation are currently more exposed to the internet performing most of their day to day activities online which makes it a perfect opportunity for NetEaese to entice them on their gaming and music services which when put into context has a huge market potential.

On the financial front which is an indispensible part of a company, NetEase has a clear advantage in terms of expenses required to run the company. If there is a new project, it is cheaper for NetEase to implement it unlike Chevron which has to foot the exploration, refining and transportation expenses which makes it a high risk venture for Chevron. Also Chevron has to invest heavily on marketing of its new products as well as assessing the reception of its products by its clients which is not the case with NetEase. For NetEase, a new project’s impacts and financial output and input can be quickly and efficiently analyzed to determine whether to continue or abandon the project, which is crucial in saving the company’s financial status on unprofitable ventures.

Considering the raised points, it is clear that NetEase has a high probability of being a good investment unlike Chevron where the risks and stakes are very high and the variables cannot be easily assessed. Therefore, for an investor it is more advisable for them to invest on NetEase rather than Chevron to stand the chance of realizing better returns to their investments.

References

Chevron Corporation - Wikipedia, the free encyclopedia. (n.d.). Retrieved July 13, 2015, from https://en.wikipedia.org/wiki/Chevron_Corporation

NetEase - Wikipedia, the free encyclopedia. (n.d.). Retrieved July 13, 2015, from https://en.wikipedia.org/wiki/NetEase