14 DAY TRIAL // Everyone saw this one coming, Baidu, the leading Chinese search engine, has posted great financial results in the first quarter after Google abandoned its search operations locally and moved all search efforts to its Hong Kong service. Baidu has been growing in terms of revenue for quite a while now, but these latest numbers are exceedingly optimistic. Net income more than doubled in Q1 2010 compared with the previous year and revenue also saw a significant boost.
"We delivered a quarter of record revenue and strong profitability despite the usual seasonality associated with the Chinese New Year holiday," Robin Li, chairman and chief executive officer of Baidu, said. "In particular, Phoenix Nest's performance continued to exceed our expectations as customers increasingly appreciate the new platform's advanced tools and superior return on investment. Looking ahead, we will continue to innovate and educate Chinese companies about the benefits of search engine marketing with Baidu."
Revenue was up 59.6 percent, reaching $189.6 million in Q1. Net income saw an even bigger increase, jumping 165.3 percent to $70.4 million. Virtually all the revenue came from advertising, $189.5 million, and the strong numbers indicate that the Chinese market is a seeing solid growth.
Interestingly, Baidu says it has had 221,000 advertising customers in Q1, an almost 20-percent rise over the previous year, but a decrease of 0.9 percent over Q4 2009. It was to be expected that this number would be higher, as customers switched to Baidu from Google, but it looks like the overall decline compensated for the move.
Google made a very publicized move last month, effectively dropping censorship of its search engine in China. The company said at the beginning of the year that it would no longer censor search results and, after negotiations with officials failed, surprising no one, it started redirecting traffic from Google.cn to its Hong Kong portal.