Tech and Web NEWS

Baidu Google search engine conflict

By Amarendra Bhushan for CEOWORLD Magazine Updated:February 10, 2010

China’s most popular Internet search engine, Baidu Inc (BIDU, News, Press Releases: 569.65 +4.9901 +0.88%, yield: N/A, cap: 19.797B, 1yr target: 526.51), fourth-quarter earnings rose 48% and said it would gain from Google’s (GOOG, News, Press Releases: 560.00 -6.40 -1.13%, yield: N/A, cap: 178.1B, 1yr target: 671.81) departs from the China market. Baidu, which controls over 60 percent of the search market in China, upbeat outlook, suggesting it has turned a corner in the transition to a new advertising system. Baidu shares jumped nearly 9 percent in U.S. after-hours trade to a record $473.58.

Baidu earned $62.7 million, or $1.80 per share, for the three months ended Dec. 31, compared with $42.3 million, or $1.22 per share, a year earlier. Excluding stock-based compensation expenses, Beijing-based Baidu earned $1.88 per share in the latest quarter.

Revenue rose 40 percent to $184.7 million. On average, analysts polled by Thomson Reuters projected profit of $1.68 per share on revenue of $180 million.

Baidu said that the ad system had put in a “better than anticipated performance”—driving the results, which were above the company’s guidance and analyst forecasts.

Baidu has been aggressive in rolling out a new advertising system dubbed Phoenix Nest, but many have wondered if the company has pushed too hard with the advertising system, particularly after the recent departures of two top executives. Recent hacker attacks have added to Baidu’s headaches.

Baidu executives hinted that they do see longer term benefits from Google’s conflict with Beijing, and its threat to pull out of the China market. For instance, Baidu chief executive Robin Li said Baidu is now the default search engine for all Motorola Inc. (MOT, News, Press Releases: 7.18 -0.17 -2.31%, yield: N/A, cap: 16.606B, 1yr target: 8.77) phones in China that run on Google’s Android operating system.

Google, which holds a distant second place behind Baidu in China’s search market, last month said it plans to stop censoring results on its China-based search engine, even if that means being forced out of the country.

Like this article! ‹ How to Use Twitter to Find Jobs? Iconix Brand Group (ICON) – Licensing Profits ›
Share this Post: Get It Delivered To Your Inbox