Baidu fends off Google in China

Sales and profits double at China's search leader

Simon Burns in Taipei

vnunet.com, 25 Apr 2008

Chinese internet search leader Baidu continues to grow, despite strong pressure from Google.

The firm's first-quarter results show revenues doubling and profits up more than 70 per cent.

Baidu reported quarterly revenue of $82m, up 108.4 per cent from the same period a year ago. Net income was $20.9m, an increase of 71.5 per cent.

Baidu holds a share of the China search market estimated at about 60 per cent, while Google's Chinese and international websites receive about 25 per cent. There has been little change in the two companies' market shares recently.

Unlike the much larger Google, Baidu derives the bulk of its revenue from the paid placement of search results.

Baidu's 'online marketing customers' increased 43.8 per cent to 161,000, and profit per customer was up 44 per cent to about $510, the company said.

Instrumental to our growth were the ceaseless efforts of our salesforce and customer service teams

Robin Li Baidu

As the battle with Google hots up, Baidu has doubled its quarterly research and development spending to $7.3m.

The company launched a Japanese edition of its search engine last year and has fired off a constant stream of other initiatives, including a Wikipedia clone and an instant messaging service.

Baidu spent $4.3m on its Japanese search service during the quarter, which included a relaunch.

Baidu Japan's audience doubled during the quarter, but remains small at just one per cent of the audience for the range of services offered at local search market leader Yahoo.co.jp, according to data gathered by online statistics firm Alexa.

"Instrumental to our growth were the ceaseless efforts of our salesforce and customer service teams who continued to deliver strong results despite a long Chinese New Year holiday and severe snow storms across large parts of China," said Baidu chairman Robin Li.

Baidu also announced an exclusive deal under which users of major ISP China Netcom will be redirected to a Baidu search page when they enter a nonexistent or incorrectly-formed domain name.

China Netcom has 20 million broadband internet subscribers out of a total of more than 120 million fixed line phone and internet customers.