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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.