Baidu shareholders are likely loving Google to death right now. The Chinese search engine company’s shares are soaring, surpassing the $600 price mark this morning for the first time since it started trading on the U.S. public markets in August 2005.
Baidu’s stock price jumped yesterday too, after investment firm Kaufman Brothers upgraded shares from hold to buy and raised its price target to $690 on expectations for the Chinese company to pick up the market share in their home country that Google will probably lose.
When you look at Baidu’s stock performance over the last 3 months, the jump is even more notable: its lowest price point this year was $386.5 (on 12 January 2010) while recent trading puts the value at no less than $606 per share. That’s more than triple the stock registered a year ago, and it puts Baidu’s current market capitalization at about $21.1 billion.
For the sake of comparison: that’s close to Yahoo’s market cap ($22.5 billion) but a far cry from Google’s ($172 billion).
Earlier this year, Baidu reported blow-out financial results for the fourth quarter of 2009: the company’s Q4 profit rose 48.2% to 427.9 million yuan (approx. $62.7 million), or $1.80 a share.
The recent surge in shares can not be 100% attributed to Google’s withdrawal from China, however: Baidu already had double its market share in China even before Mountain View publicly disclosed its plans to possibly shutter its Chinese operations, and Baidu is now operating the third largest search engine in the world. Baidu also recently co-invested $50 million in a giant online shopping mall, and raised another $50 million for its new online video endeavor in China, so it’s poised for growth in other areas than search.
Still, Baidu is clearly benefiting as Google backs away from China.
Baidu is the largest Chinese language search engines. Baidu’s mission is to provide the best way for people to find information online, including Chinese language web pages, news, images and multimedia files though links provided on their website. In addition to serving individual Internet search users, Baidu also provides a platform for businesses to reach potential customers online. The company’s online marketing services include auction-based P4P and tailored solutions. via: Baidu