Baidu expects stronger earnings after Google's row with Beijing

Baidu is forecast to report stronger than expected second-quarter earnings tomorrow, benefiting from online search rival Google's much-publicised row with mainland authorities over internet censorship.

The Beijing-based firm - the country's top internet search services provider, with a 70.8 per cent market share - is expected to post revenue in the range of US$280 million for the quarter to June, well ahead of its earlier guidance of between US$268 million to US$274 million, according to analysts at JP Morgan Asia-Pacific Equity Research.

That forecast is also higher than the market's consensus estimate of US$270 million. First-quarter revenue for Baidu was up 59.8 per cent year on year to US$189.6 million.

In a report, JP Morgan analysts said Baidu's Web traffic received a boost after Google, which called for censorship-free online searches on the mainland, in March redirected the operation of its simplified-Chinese website to computer servers in Hong Kong.

Robin Li Yanhong, chief executive at Nasdaq-listed Baidu, acknowledged as much in a conference call with analysts in April, when he said: 'We believe customers are allocating a larger portion of their overall online marketing budget to us.'

Data released by iResearch Consulting Group on Monday showed that Baidu's domestic online search market share rose to 70.8 per cent in the second quarter from 67.8 per cent the previous quarter. By comparison, Google's share fell to 27.3 per cent from 29.5 per cent.

Google was able to renew its licence on the mainland after agreeing that all its content would be subject to the supervision of regulators. Beijing Guxiang Information Technology Co, operator of Google's mainland website, pledged to 'abide by Chinese law'.