Thursday, February 23, 2006

Avoiding Google's Frontal Assult, Robin Li Looks Beyond China

Feb. 24 Beijing

According to media reports, Baidu, the famed "China's Google", reported fourth quarter earnings on Tuesday. Baidu continued it's strong uptrend of growth with better than expected results. However, as Google making strides into the Chinese market, Baidu is facing increasingly fierce competition.

Fourth quarter revenue came in at $14.2 million or 29.2% Q/Q. Net income came in at $3 million or 188.7% Q/Q.

One day before the announcement, Baidu's major rival Google formerly opened it's China headquarter.

Baidu's chairman and CEO Robin Li said: "As our business growing rapidly, we are investing heavily in search technology, products, capacity, sales, as well as in human resources".

Though maintaining fast growth rate, Baidu's performance is still far behind Google's. Recent data showed that Google's global revenue surpassed $6 billion in 2005. Similar to Google, Baidu's major source of revenue is in paid search ranking services. China's online advertising market reached $400 million in 2005. Baidu hopes to catch a larger share. To reach the goal, Baidu must face Google's strong challenge. Li indicated that Baidu may consider to enter markets outside of China.

Google has leaped a giant step in the Chinese market by establishing it's Chinese headquarter. The company has installed servers in China for the first time to speed up the responses to Chinese internet users as well as saving communication cost. Besides that, Google is also planning to establish a research and development center in China in the fall.

Facing the aggressive invasion of Google, Robin Li is still full of confidence with Baidu's leadership position in the Chinese market. "As the number one web search provider in China, we will continue to expand our lead", Li said.

Mole from Sina Tech

1 Comments:

Blogger China Stock Blog said...

The China Stock Blog has a full transcript of Baidu's conference call: http://chinastockblog.com/

4:20 PM  

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