Lowered Expectations As Baidu Enters Europe

    June 7, 2007

Just a few days ago, Baidu announced its intentions to expand into Europe.  Now its stock price is up, and its reputation is going down; things could be worse, but this isn’t exactly an ideal state of being for the Chinese search engine.

Even that good fortune in the financial markets has its drawbacks, as Seeking Alpha’s James Taylor writes, “Downside risk in this stock is very high.”  On either side of that statement, Taylor piles up (a total of) around 900 words explaining why all might not be well.

Some of his evidence could pertain to Baidu’s planned launch in Europe.  “The company’s “3 month growth rate in global internet site traffic growth is down 19%,” Taylor states.  “Baidu’s global internet site usage currently sits at 5.75%.  They’re [sic] growth is also limited largely to the Asian community.”

From Baidu’s perspective, that’s not exactly encouraging.  What makes it even worse are the findings of a new study – they indicate that Baidu’s popularity in China might not be due to any sort of superior performance.  “Blind tests show that Chinese users prefer Google China to Baidu,” announces the headline.

Our previous coverage of Baidu’s impending move into Europe highlighted still other dangers; specifically, Google and Yahoo, who have been trounced in China, may go looking for a little payback.

Still, not all’s lost for Baidu.  Heck, the figurative battle hasn’t even begun.  The Chinese search engine may just eke out an existence in Europe, after all.