14 DAY TRIAL // Leading Chinese online search provider Baidu posted its financial results for the second quarter, showing strong growth in search ad earnings with overall revenue at 1.1 billion yuan ($160.7 million). The revenue was up 37 percent year over year and 35 percent from the first quarter, slightly above analyst estimates, which put it at around $158 million. The results are a turnaround from the previous two quarters, which saw a revenue decline due the search engine dropping some key advertisers.
"Our focus on execution drove another strong quarter for Baidu," Robin Li, Baidu's chairman and CEO, said. "Our ongoing initiatives to improve user and customer experience further solidified Baidu's leading market position as both large companies and SMEs are increasingly drawn to the superior ROI offered by Baidu's P4P platform."
Net income for Q2 was 383.3 million yuan ($56.1 million), coming in at $1.61 per share. This was a 44.6 percent rise from last year's net income, which was $38.6 million, or $1.11 per share. The vast majority of the income came from online advertising, which totaled $160.6 million from the company's reported 203,000 active advertising customers, a 12.2 percent increase from last year and a 9.7 percent rise from the previous quarter.
For the coming quarter the company forecasts further growth, estimating revenue from $184 million to $189 million, while analysts expect it to come at $178.9 million. Baidu is the largest search provider in China, controlling 61.6 percent of the market, followed by rival Google with only 29 percent. The positive results come after two quarters of loss after Baidu dropped some of its advertisers, which sold unlicensed medical and pharmaceutical products.
"The inherent scalability of Baidu's business model should allow us to produce strong margins as revenues continue to grow rapidly. At the same time, we will continue to invest in initiatives that best position Baidu for continued long-term growth," Jennifer Li, Baidu's CFO, said.