Baidu searching for strategic investments
Baidu, the mainland's leading internet search services provider, is plotting more strategic investments this year after posting strong gains in the quarter to June 30.
The Beijing-based company, whose name means 'hundreds of times', yesterday reported a 70 per cent increase in second-quarter net profit to 2.77 billion yuan (HK$3.36 billion) from 1.63 billion yuan a year earlier as it added more online marketing customers during the period.
That beat the 2.5 billion yuan average of 10 analysts' forecasts compiled by Bloomberg. Revenue rose 60 per cent to 5.46 billion yuan from 3.41 billion yuan the previous year.
'One of the real highlights this quarter is our success in growing our customer base,' Baidu chief executive Robin Li Yanhong said in a conference call with analysts.
Nasdaq-listed Baidu's total number of online marketing customers rose 18 per cent to 352,000 in the quarter, while average monthly revenue per online marketing customer swelled 35 per cent to 15,500 yuan.
Business from small and mid-sized enterprises is expected to continue growing, as larger online advertisers have been conservative owing to concerns about the economy.
'In the coming quarters, we will maintain momentum by rolling out optimised sales processes and more advanced tools to help current and potential customers increase returns on their online marketing spend,' Li said. He vowed to further improve mainland users' online search on smartphones and other mobile devices.
Baidu estimates its total third-quarter revenue will range from 6.24 billion yuan to 6.41 billion yuan, representing a 49.6 per cent to 53.5 per cent year-on-year increase.
Li, who co-founded Baidu in 2000, said the company was still looking for key acquisitions to bolster its competitive advantage.
'In most cases, I would say that I prefer to buy,' he said. 'There are just a lot of cases [in which] there are just not good enough applications or services or products for us to buy.'
Baidu chief financial officer Jennifer Li Xinzhe pointed out that the company was 'in a very robust investment cycle'. She said: 'It is very important for us to make strategic investments for the long-term sustainability of this business.'
Research firm Analysys International estimated Baidu's share of the mainland's internet search market reached 78.6 per cent last quarter. Google, the global leader, had a 15.7 per cent share.
Baidu's dominant share of the mainland's online search market, five times foreign competitor Google's 15.7 per cent