According to bloomberg, Net income climbed to 1.63 billion yuan ($252.6 million), or 4.67 yuan per American depositary receipt, compared with 837.4 million yuan, or 2.4 yuan, a year earlier, Baidu said today in a statement. That exceeded the 1.5 billion yuan average of 12 analysts' estimates.
Customers bought more advertising on Baidu as the Beijing-based company extended its lead over Google Inc. (GOOG) and added more users in China's search-engine market. Chief Executive Officer Robin Li, ranked the nation's richest man by Forbes magazine, is stepping up acquisitions to offer new services to meet rising competition from Internet rivals including Tencent Holdings Ltd. and Alibaba Group Holding Ltd.
“Sectors like education and financial continue to spend more on Baidu to build awareness,” Eric Wen, who rates Baidu shares “buy” at Mirae Asset Securities in Hong Kong, wrote in a July 22 report. “Baidu's growth potential is still bright.”
Baidu's shares increased as much as 8.9 percent to $170.51 in extended trading, after closing at $156.54 on the Nasdaq Stock Market. The stock had gained 62 percent this year, after more than doubling in 2010. That compares with the 21 percent gain in the Hong Kong-traded shares of Tencent, China's biggest online-games company, and the 22 percent decline in Alibaba.com Ltd. (1688), the business-to-business unit of Alibaba Group, the country’s biggest e-commerce company.
Revenue Forecast
Revenue is expected to be 3.95 billion yuan ($611.1 million) and 4.05 billion yuan ($626.6 million) in the third- quarter, Baidu said. That compares with the 3.67 billion yuan average of analysts’ estimates compiled by Bloomberg.
Baidu accounted for 75.9 percent of China’s search-engine market by revenue in the second-quarter, rising from 75.8 percent in the previous three months, according to research company Analysys International. Google's share dropped to 18.9 percent from 19.2 percent, the researcher said.
Google has been losing ground in China's search-engine market since January 2010, when the Mountain View, California- based company said it was no longer willing to comply with Chinese regulation to self-censor Web content. Two months later, the U.S. company shut its Google.cn service and redirected Chinese users to its site in Hong Kong.
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