22 July 2010 | Author: D. Warburton Search Copywriter

Baidu profits double as search engine dominates China

Local search engine Baidu has picked up Google's losses in China's search market - and then some. The leading Chinese-language search engine reported on Wednesday that its profits more than doubled in the last quarter, ending 30 June with net revenue of 837.4 million yuan (£80.8 million).

This represents 119 per cent growth year-on-year, while sales rose 74 per cent to 1.9 billion yuan (£183.4 million).

Baidu previously reported that its profits had more than doubled since January - the same time Google announced it would "review the feasibility of [its] business operations in China" following December's cyber attacks.

Baidu was already ahead of Google.cn on its home turf before the Californian search giant revised its approach to China, with CNNMoney.com reporting it held around 58 per cent of the Chinese search market, compared to Google's 36 per cent share. The ensuing debacle saw Baidu gain six per cent of the market in Q1 alone, but it was Google's withdraw from mainland China that really boosted the company's profits.

Boasting the world's largest internet audience, even with 70 per cent of the country still offline, China is an incredibly lucrative market for search engines - and according to Baidu's CEO Robin Li, the company's dominance has just begun.

"We are just getting started," he said during a conference call. Li predicted that in the future: "Baidu will become ever more central to China's Internet ecosystem."

Of greater interest to investors than its search dominance is what this means for Baidu's market capitalisation, which now stands at $25.5 billion (£16.7 billion) - comfortably ahead of international search companies like Yahoo! and approaching that of e-commerce giant eBay.