Ted Sun had a dozen fires to fight when he became acting chief executive of Chinese Internet portal NetEase.com Inc. in September, 2001. The company was wounded by an accounting scandal, a class action lawsuit, and a NASDAQ-ordered suspension of trading in its shares. NASDAQ was threatening to kick it off the exchange, and survival was questionable. "It was really crisis time," recalls Sun, a former Bear, Stearns & Co. investment banker. "There was a management vacuum."
Sun has been in the top job for more than two years now, and has succeeded beyond almost anyone's expectations: NetEase is turning a profit, the lawsuits are settled, and the stock is trading again. Shares have tripled in the past three months, to $31.
That word "acting" is still officially part of Sun's title -- partly, he says, because originally he expected to step down after stabilizing the company and make way for a permanent CEO. But now the board has asked him to stay. For this unassuming 36-year-old, his title doesn't matter much. "It's not an issue for me," explains Sun. "People inside the company and outside the company respect me."
With good reason. The company's rise to the top of the Chinese Internet world is due in large part to Sun. After taking the top job, he quickly brought in new senior management to restore the confidence of investors and customers, who were wary of NetEase after the company in 2001 had to restate earnings following the ouster of top executives. Sun, a no-nonsense Hong Kong native who graduated from the University of Pennsylvania's Wharton School, looked beyond the flashy Net crowd for managers, hiring an accountant from KPMG to be his chief financial officer and a sales expert from News Corp. to be his head of marketing.
Sun also focused on NetEase's strength as a home for some of China's most active young Net surfers. He reduced its dangerous reliance on online advertising, and started charging for e-mail, a dating service, and online game services. Long before other Chinese Internet companies, NetEase was a leader in online games. It offers two, one with a South Korean partner and another, based on the famous Chinese novel Journey to the West, on its own. "We see our in-house development capability as our major competitive advantage in the online game market," says Sun. "We can really define the game according to Chinese culture and Chinese market needs."
With so much to do, Sun isn't thinking about that quirk in his title. "The company is not actively seeking a replacement," he says. "And I have no plans to leave." For that, NetEase investors can be grateful.