Baidu Sets Up Showdown With Google in Brazil
Baidu reports a healthy revenue increase, which may lift other Chinese Internet companies Renren and Youku.
Baidu (BIDU), the Chinese search engine giant, reported that quarterly revenue rose 82.5% as the company increased its mobile user presence.
Fourth-quarter net income attributable to Baidu increased to RMB 2,050 billion, or $326.3 million, from RMB 1,161 billion a year earlier, the Beijing-based company said in a press release Thursday. Earnings per share were $0.95, 90% higher than last year's $0.50 earnings per share and beating the $0.91 estimate of analysts polled by Thomson Reuters.
More than 15% of the company's search queries originate on mobile devices, a market Baidu is looking to grow, said Chief Executive Officer Robin Li in a conference call Thursday. Daily users of the search engines map feature on mobile devices increased tenfold during the year.
"We developed a mobile phone platform called Baidu Yi to integrate our services, including Web search, music, maps, and LBS, to ensure that users get the premium Internet experience right on their mobile devices," Li said. "Currently we have a partnership with Dell (DELL), and we are looking forward to working with more vendors and to introducing Yi to many more users this year."
Baidu stocks are up nearly $20 in the seven weeks of 2012, as earnings anticipation fueled a rise to $142.02 at the end of the trading day Thursday.
The Internet search provider said operating income for the first quarter of 2012 would be between $666.5 million and $688.0 million, a 72.2% to 77.7% increase from the first quarter of 2011. The company will continue to focus on mobile users, Li said, and investigate long-term international investments.
Google (GOOG) reported a net income of $2.705 billion for the third quarter of January 19, a 6.4% increase from fourth-quarter 2010 earnings of $2.543 billion. The Mountain View, California-based company has shifted its focus from myriad offerings to a few better known and larger products, said Chief Executive Officer Larry Page in a conference call January 19.
"We're closing 12 of our products, including Buzz, Knol, and Friend Connect, integrating a whole bunch of others into features of existing products," he said in the call. "We can double down on the really big bets we had made like Android, Chrome, Gmail, Display, and YouTube."
Baidu and Google may be set for a showdown in Brazil, where Baidu announced plans to expand on February 15. About 90% of Latin American searches go through Google, which had more than 500 employees in the region at the end of 2011.
Chinese Internet Companies
Youku (YOKU), a Chinese Internet video hosting company, may also be able to ride some of the momentum from Baidu. The company announces 2011 earnings later this month. The company posted $41.2 million net revenue in the third quarter, a 129% increase from the third quarter of 2010. The stock has risen from $16.69 to $20.88 so far this year.
Renren (RENN), a social networking platform in China, may stand to benefit from Baidu's healthy earnings and Facebook's early-February IPO. Earnings for the fourth quarter of 2011 are within the forecast range of $31 million to $33 million, according to preliminary results announced February 15. The company stock has been stable at slightly over $5, even as it reported operating losses on a non-GAAP between $15 million to $17 million from increased investments and consolidation of sites. The stock has risen about 50% in 2012.
Editor's Note: This content was originally published on Benzinga.com by Jane Sanders.
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