China's largest search engine, Baidu, has experienced an unexpected growth in its strength during the third quarter of 2011. Baidu has recently focused more on providing e-commerce and videos, which seems to have struck home with the Chinese populace. Baidu's operations have steadily grown more and more popular after the fiasco involving Google in China over censorship. With China being the largest internet market in the world, Baidu is in a good position to continue to expand across the country as its main search engine of choice.
As Reuters reports, shares in Baidu were selling for $156.54, and mere hours later, were being sold for $166.74 on Nasdaq. Their forecasted revenue for the third quarter is between $611.1 million and $626.6 million, which is considerably more than the predicted figure of $569.6 million, which was predicted on Wall Street by analysts. Baidu's online video service is already generating profit for the company through revenue and premium subscriptions to the service after only one year, and the company is attempting to penetrate other markets in mainland China. At present they are vying with Toudu, Youku and Ku6 Media in an attempt to receive rights for streaming media.
Mayuresh Masurekar, an analyst with Collins Stewart, had this to say about the recent successes of Baidu:
"The search market is growing very strongly. It's a rising tide. But Baidu has a lot of irons in the fire. It has a lot of non-search initiatives" that are rounding out its growth."
Only last week, Baidu came to an agreement with major record companies to stream music. This agreement may go some way to curbing piracy within China. Last month the company purchased China's largest travel website, Qunar.
But as Google withdraws from China, other companies have been able to get a foothold in the market and do their own thing, with at least some degree of success. Other competitors, from Sohu.com and Tencent Holdings, are also trying to gain. Due to Baidu's recent expansion these other groups may not be able to overtake but they are still able to oppose, and potentially strike home with at least a number of Chinese internet users.
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