Baidu profit doubles in record quarter

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- While Google struggles with the Chinese market, local search giant Baidu is soaring to new heights. Baidu said Wednesday that its earnings doubled in the most recent quarter as its sales hit a record high.

Baidu reported net income of 837.4 million yuan ($123.6 million) for the quarter ended June 30, up 119% from a year earlier. Sales rose 74% to 1.9 billion yuan ($282.3 million).

Investors are taking note: Baidu now has a market capitalization of $25.5 billion -- comfortably ahead of Yahoo (YHOO, Fortune 500) and edging close to eBay (EBAY, Fortune 500).

Baidu (BIDU) split its stock 10 to 1 in May, just weeks after the company said that its profit had more than doubled since January. That's when rival Google (GOOG, Fortune 500) first announced that it was considering leaving China. In March, Google moved its servers out of mainland China and said it would stop censoring its search results in the country.

As a result, Baidu got a significant boost in the Chinese Internet search market. At the end of last year, Google had 36% of market share and Baidu had about 58%. But in the first quarter alone, Baidu gained an additional 6 percentage points of the market.

The company said its total online active marketing customers grew to 254,000, a 25% rise from 2009.

Baidu CEO Robin Li was upbeat about the company's ability to keep growing its customer base, noting the massive growth potential of the market in China, where nearly 70% of the country is still offline.

"We are just getting started," he said during a conference call. In the future, "Baidu will be come ever more central to China's Internet ecosystem."

But earlier this month, Google said it had renewed its license with the Chinese government and will be allowed to continue operating in the country -- though the search giant did not make any concessions regarding censorship.

It remains to be seen what effect the Google/China détente will have on Baidu's newly improved market share.

Meanwhile, Baidu's U.S. rivals have posted disappointing results. Earlier this month Google reported quarterly profit that rose from its year-ago results but missed Wall Street forecasts, while Yahoo's (YHOO, Fortune 500) sales missed estimates. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,912.11 -70.48 -0.42%
Nasdaq 4,442.70 -2.21 -0.05%
S&P 500 1,969.95 -8.96 -0.45%
Treasuries 2.46 -0.03 -1.16%
Data as of 1:29am ET
Company Price Change % Change
Frontier Communicati... 6.79 0.85 14.31%
Windstream Holdings ... 11.83 1.30 12.35%
AT&T Inc 36.59 0.94 2.64%
CenturyLink Inc 39.90 2.19 5.81%
Bank of America Corp... 15.34 -0.16 -1.03%
Data as of Jul 29

Sections

McDonald's may be liable for worker lawsuits, not just franchisees, in a government ruling that could change the fast-food business. More

Amgen is the latest to continue corporate America's cost cutting strategy, even as the economy is supposedly on the mend More

Bunch o Balloons allows multiple water balloons to be filled at once. Parents are loving it -- to the tune of $645,000. More

Steve Mason, a pastor from California, inherited more than $100,000 in student loan debt when his 27-year-old daughter died suddenly in 2009. With interest and late penalties, the debt has since ballooned to $200,000. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.