Google’s Chinese Competitor Baidu Doubles Profit

    October 26, 2007

In terms of dollars, Baidu is still far behind Google.  But in terms of percentages, the Chinese search engine bested its American competitor, posting third-quarter profits that were up 113 percent over last year’s.

That number corresponded to a similar increase in revenue, and both figures reportedly beat analysts’ expectations.  Baidu is still dominating the Chinese market, too; Google has only managed to make headway of the two-steps-forward-one-step-back variety.

Nonetheless, not everything went well after Baidu released its earnings report.  An AP article notes, “Despite the better-than-expected results, investors seemed to want more.  Baidu’s U.S.-traded shares fell $11.12, or 3.3 percent, to $323.18 in after-hours trading.”

Since Baidu’s net income only totaled $24 million, that drop doesn’t seem too unreasonable.  Also, although the Chinese search engine has frequently benefited from government intervention, that practice may come to a stop as the 2008 Olympics take place, giving investors even more reason to worry.

In other Chinese search engine news, Google’s Kai-Fu Lee has announced plans to focus on the mobile market.  It’s possible (though unlikely) that this could have been another factor in Baidu’s drop.