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Baidu Says Net Profit Rises 400%
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Top Chinese web search portal Baidu.com Inc yesterday reported 400 percent growth in net profit in the fourth quarter, which pushed the company's stock price on the NASDAQ market up by 1.5 percent to US$115.

Beijing-based Baidu, known as the Chinese Google, said its net profits amounted to US$15.7 million in the past quarter, increasing 400 percent over the same period of 2005, which translated diluted earnings per share into 45 cents.

"We are pleased to deliver another quarter of robust results as our rapidly growing brand recognition and our focus on providing the best user experience allowed us to strengthen our leading position in Chinese search," said Robin Li, Baidu Chairman and CEO.

Its net income for 2006 was US$38.7 million, 534 percent higher than 2005.

An increasing endorsement of the Internet from the ordinary consumers and small and medium enterprises and an expanding customer base has expanded Baidu's market share almost three fold in the past year.

China had 137 million Internet users by the end of 2006, 23 percent more than at the end of 2005. The Internet market research firm China IntelliConsulting Corp (CIC) said in September that the market share of Baidu rose from 51 percent in August 2005 to 62 percent in Beijing, Shanghai and Guangzhou, the three largest cities in China, while that of Google fell to 24 percent from 33 percent.

The Chinese search engine firm said its revenues in the fourth quarter were US$34.8 million, with $34.6 million of that coming from search-related marketing revenue.

However, Peter Lu, chief consultant with CIC, warned a slowdown in the first quarter deserves special attention.

Baidu said that its revenue would be between US$34 million to US$35 million this quarter, with a year-on-year growth between 95 percent to 103 percent, the first time its quarterly growth may fall below 100 percent year-on-year since 2005.

The firm attributed the slowdown to seasonal factors, with the Chinese Lunar New Year which arrives on Sunday falling in the first quarter, usually the weakest quarter for advertising and marketing firms.

Lu said while Baidu's growth comes mainly from the huge traffic on its website, it should pay more attention to the quality of its services.

Baidu ranks as the fourth most popular website in the world, after Yahoo!, MSN and Google.

(China Daily February 16, 2007)

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