Baidu plans social-networking expansion
Mainland internet search giant Baidu wants to expand its social networking-related services and may pursue a separate listing for online video company, Qiyi.com, to further grow its business in the world's largest internet market.
Chairman and chief executive Robin Li Yanhong revealed those plans yesterday after Baidu reported a nearly threefold growth in net income in the quarter to December.
Baidu, the country's leading internet search service provider, saw fourth-quarter net income reach 1.16 billion yuan (HK$1.37 billion), up 171 per cent from 427.86 million yuan a year ago, on strong advertising sales generated from large and small enterprise customers.
With rival Google continuing to lose domestic market share following its dispute with mainland authorities early last year, Nasdaq-listed Baidu's revenue last quarter rose 94.4 per cent to 2.45 billion yuan from the previous year's 1.26 billion yuan.
Baidu, which was established in Beijing in 2000 by co-founders Li and Eric Xu Yong, generates most of its revenue through pay-per-click advertising and customised search solutions.
Online marketing revenue last quarter grew 94.4 per cent year on year to 2.45 billion yuan and had about 276,000 active customers, which represented a 23.8 per cent year-on-year increase.
Mainland research firm Analysys International estimated that Baidu's share of the domestic online search market reached 75.5 per cent in the fourth quarter last year, from 73 per cent in the third quarter, 70 per cent in the second and 64.2 per cent in the first.
By comparison, United States-based Google's online search market share on the mainland has fallen steadily to 19.6 per cent in the fourth quarter from 21.6 per cent, 24.2 per cent and 31 per cent in the previous three quarters.
Baidu expects to generate total revenue ranging from 2.38 billion yuan to 2.45 billion yuan this quarter.
'Looking forward we will further integrate search with online activities such as e-commerce and social networking,' Li said.
He noted that Baidu would continue to invest in developing social-networking products. Li said the current range of so-called 'community' services - including Post Bar, Knows, Encyclopedia, File Sharing and Music Master - 'are significant drivers of growth' and 'collectively represent a quarter of Baidu's total traffic'.
The group's majority-controlled Qiyi.com, which was established eight months ago and features high-quality licensed video content, 'could list in the public market going forward', he said.
In February last year, Providence Equity Partners invested US$50 million in Qiyi.com.
The US private equity firm is part of the investor group that recently agreed to buy the 26 per cent stake held by Shaw Brothers (Hong Kong) in television station Television Broadcasts.