Baidu up 5% on analyst confidence on the 2012 revenue in slowing Chinese economy

Baidu up 5% on analyst confidence on the 2012 revenue in slowing Chinese economy

Baidu.com, Inc. (ADR) (NASDAQ:BIDU) traded up 5% in the last week on strong positive results posted by Sohu.com Inc. (SOHU), a leading online brand and Internet portal in China.

Though Baidu’s rival Sohu had posted revenue and earning that surpassed analyst estimate but analysts still believe that a cut throat competition by Baidu in the slowing Chinese economy may have a challenging impact on Sohu’s revenue. Soho.com is on other hand expected to benefit from its strength in online games.

The online games gross margin reported by SOHU was 87.0% as compared to 90.0% in the year-ago quarter resulting from lesser number of in-game and virtual items distribution in the martial arts MMO game TLBB.

Total revenue was up 28.6% yoy to $255.7 million and ahead of the guidance revenue of $244.0 million to $250.0 million. Search revenue soared 111.3% year over year; online advertising revenue increased 20.6% year over year and brand advertising revenue grew 2.4% year over year.

Baidu’s brand ad products include Brand Zone which has now over 1000 brand advertisers and this offering enjoys searcher attention. Brand Zone has the highest renewal rate among other products offered by BIDU and it is expected to grow 100% in 2012 as implied by Baidu’s Sales VP, Wand Zhan.

It has also been reported that BIDU and SINA will be co-operating in terms of search, content, platform, technology, resources, and five in the wireless field. Recently, mobile phone Sina has been adopted across the Web search service provided by Baidu. Analysts’ data show that until the first quarter of 2012, China Mobile (microblogging) scale of Internet users reached 450 million, the market size of $ 30.6 million.

Baidu in the last six months has launched the Baidu cloud terminal system and cloud ROM, joint number of mobile phone manufacturers’ layout of the terminal.