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Baidu's Profit More Than Doubles

Published on July 22, 2010
by Owen Fletcher and Joan E. Solsman

Baidu Inc.’s (BIDU) earnings more than doubled in the second quarter from a year earlier, as the Chinese Internet-search leader benefited from rival Google Inc.’s reduced presence in the fast-growing China market.

Baidu reported a net profit of 837.4 million yuan, or about $123.5 million, for the second quarter, compared with 383.3 million yuan a year earlier.

The record profit translates to 2.4 yuan, or 35 U.S. cents, per American depositary share, compared with 1.1 yuan a year earlier. Excluding share-based compensation, earnings were 36 cents. Analysts had predicted 31 cents a share.

The Beijing-based company said it saw growth in the number of customers and its ability to extract revenue from them. Total active online-marketing customers grew 25 percent to 254,000 in the latest quarter, while revenue per customer rose 39 percent.

Google (GOOG), which has long been the No. 2 player in China’s search market behind Baidu, moved its Chinese search engine to Hong Kong in March after deciding it would no longer follow Chinese government requirements to censor its results. Users in China can still access the Hong Kong-based service, but the move irked Chinese regulators, and appears to have slowed the U.S. firm’s traffic in China.

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