Baidu.com's Net More Than Doubles

The Wall Street Journal Online

NEW YORK -- Chinese Internet-search provider Baidu.com Inc. said Wednesday its second-quarter net profit more than doubled from a year earlier as the number of online-marketing clients rose, and the company forecast strong revenue growth in the current quarter.

Beijing-based Baidu.com, which is China's most popular search engine, reported net profit of 141.9 million yuan ($18.6 million, or 54 cents a share) for the three months ended June 30, up from 58.5 million yuan a year earlier. The results came in well above analysts' expectations. Analysts polled by Thomson Financial were expecting, on average, a per-share profit of 43 cents a share on revenue of $49 million. Revenue also more than doubled to 401.3 million yuan from 191.6 million yuan a year earlier, the company said in a statement.

"During the second quarter, we saw robust revenue growth and a healthy increase in online-marketing customers," Chairman and Chief Executive Robin Li said in the statement.

Online-marketing revenue more than doubled to 400.6 million yuan during the second quarter, helped by an increase in the number of active online-marketing customers and revenue per customer, Baidu.com said. Revenue per online marketing customer rose 48% from a year earlier to 3,100 yuan. Baidu.com said the number of active online-marketing customers during the quarter rose to 128,000, up 14% from the first quarter. For the third quarter, Baidu.com expects revenue of between 492 million yuan and 506 million yuan.

Nasdaq-listed shares of Baidu.com closed Wednesday's session up 4.7% at $183.23. In after-hours trading, shares of the company surged to $223.

Baidu.com is the dominant search site in China. In the April-June period, it accounted for 58% of revenue in China's Internet-search market, ahead of Google's 23% market share, according to Beijing-based telecommunications and technology research firm Analysys International.

Google Inc. wants to boost its market share in China, the world's second-largest Internet market after the U.S. with 162 million users at the end of June. In April, Google Chief Executive Eric Schmidt said his company was gaining market share and aims to become the market leader in China. Last month, Google and local Web portal Sina Corp. said they plan to work together on search services and advertising.

Baidu isn't seeking similar partnerships because the number of people using its Web site is growing fast, Li said during a conference call on Baidu's second-quarter earnings. Baidu Chief Financial Officer Shawn Wang also said the company now has more than 3,000 sales staff after adding roughly 500 during the previous quarter.