Baidu Making Gains

19 September

Baidu Making Gains

“…hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood.” This search, depicted in an 800-year-old poem, is successful – and the inspiration for a relatively new China-based search engine, Baidu. “Baidu” means “hundreds of times.” It also means huge success for China in the search industry.

Baidu is trading at absurdly high prices, and Robin Li, CEO and China’s richest man, saw his substantial wealth (estimated at $3.5 billion in 2010) double when Google was forced out of China. His little search engine is doing well, too; first quarter net income rose to $164.6 million – an increase of 123 percent. First quarter revenues grew by over 88 percent to hit $372 million. Google, by comparison, saw first quarter revenues of $8.58 billion, but Baidu is no doubt up and coming.

Which stars aligned to give this search engine such incredible growth? Google is a big piece of the puzzle; after refusing to conform to Chinese governmental search restrictions, Google moved out of China, allowing the burgeoning search industry to bloom for Li’s company. There is virtually no competition.

Li says, “Search just became the most popular application for Chinese internet users, and there is still a lot of growth to expect for many years down the road.”

There are also rumors that Facebook may be moving into China and striking up a partnership with Baidu, although this is still very much in the speculative stage. Banned in China since 2009, Facebook would operate under China’s rules, which would almost certainly clamp down on political and social discussion (and criticism), which is the order of the day in the US and many other countries.

All of this has translated into more revenue, growth, and prestige in the fiercely competitive search industry for Baidu.

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