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Baidu’s Stock Up On Word Of Facebook Partnership

Investors get behind idea of new Chinese social network

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[ Business]

The stock market, as a whole, did not do well today.  The Dow and Nasdaq stayed about level, gaining and losing 0.01 percent and 0.32 percent, respectively, while AOL, Apple, and Yahoo all suffered losses of greater than 1.00 percent.  But Baidu’s stock rose by a significant amount thanks to news that it’s partnered with Facebook.

Some background info on that development: as we reported earlier, Facebook and Baidu are supposed to be working together on a new, China-specific social network.  And that has a sort of unstoppable sound to it, considering Facebook’s expertise in the field and Baidu’s search dominance in China.

So if the social network comes into being, proves popular, and attracts advertisers (who should already be more than familiar with Baidu), it could represent a significant new stream of revenue for whatever parties share in the profits.

More than a few investors have apparently perceived and bet on that possibility.  Baidu’s stock jumped 2.68 percent during normal trading hours today, putting its market cap at an impressive $50.63 billion.

By comparison, the respective market caps of AOL, IAC, Yahoo, and eBay are just $2.11 billion, $2.72 billion, $21.72 billion, and $40.47 billion.

Of course, the trick will be seeing if Baidu’s stock manages to sustain these levels over time.  Baidu and Facebook still haven’t confirmed the existence of any alliance, and even if they are working together, it’ll probably take more than a few weeks for their new social network to come together.

Baidu will have to deliver its first quarter earnings report soon, too, which is sure to have an effect one way or the other.

Baidu’s Stock Up On Word Of Facebook Partnership
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  • http://www.redmudmedia.com Ralph du Plessis

    This is an interesting outcome considering the Chinese government’s reluctance to dance with Facebook previously.

    • http://www.webpronews.com/ Doug Caverly

      Yep. Baidu’s involvement might convince the government to back off, but Facebook wouldn’t have much of a shot at this on its own.