Baidu’s efforts to strengthen its mobile advertising business appear to finally be bearing fruit. Investors were reassured by the Chinese search giant’s 3Q outlook, sending its stock price soaring 14% to $129.09 in after hours trading. The company forecasts 3Q revenue between $1.422 billion (8.7 billion RMB) and $1.46 billion (8.96 billion RMB), representing a 39.7% to 43.3% year-over-year increase.
Baidu reported that its 2Q2013 net income decreased 4.5% to $450.8 million (2.644 billion). Total revenue rose 38.6% to $1.232 billion (7.561 billion RMB).
Online marketing revenue grew 38.3% to $1.22 billion (7.5 billion RMB), while Baidu’s active online marketing customers rose 33 percent from a year earlier to 468,000. Revenue per online marketing customer was about $2,623 (16,100 RMB), a 3.9% increase from a year ago and an 11% increase from 1Q2013.
“We made solid progress in the second quarter, adding a record 58,000 online active customers,” said Baidu CEO Robin Li in a statement. “The adoption of our mobile platform gained momentum and mobile monetization improved. Mobile revenues for the first time accounted for over 10% of our total revenues this quarter.”
Baidu has made several high-profile acquisitions to strengthen its mobile play as it copes with increasing competition in the search market from competitors like Qihoo 360 and Sogou.com, which recently announced that they are in negotiations for a merger. Last week, Baidu announced its $1.9 billion acquisition of 91 Wireless, one of the China’s biggest app distribution platforms. Li has said that the company “prefers buy to build because it will save us time.”
In the first quarter of this year, Baidu ramped up its research and development spending. It has also made several high-profile investments in the past year to ramp up advertising sales growth and bolster its mobile business, including a stake in online video site iQiyi last November and the purchase of PPStream as it prepares to do battle with Youku-Tudou, China’s equivalent to YouTube.
“Our recent investments have further strengthened Baidu’s position in key strategic areas such as search, LBS, app distribution and online video. Our market-leading technology, innovative new products and unrivaled customer value proposition will keep us at the heart of the Internet in China,” said Li.