Baidu Comments on Competition in China

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Includes: BIDU, GOOG
by: Ezra Marbach

From Baidu's (NASDAQ:BIDU) Q2 2006 earnings conference call transcript:

Robert Peck – Bear Stearns

I was curious if you could provide us a little more color around competition? We know Google has been signing up more and more resellers there, and Yahoo! has been putting more of an effort, particularly with the Alibaba partnership. Could you just give us a little more color on what the delta has been over the last three months? What changes you have seen as far as the competitive environment? Thanks.

Robin Li - Chief Executive Officer

As far as we are concerned, we did not see any meaningful change during the past quarter. We continue to be in the leadership position both in terms of user traffic as well as customer numbers. We have the strongest distribution network nationwide in almost all of the major markets, the strongest distributors are Baidu and distributors exclusive to us.

We also have direct sales teams in a number of cities, which is growing very rapidly. We believe that we are very well-positioned in terms of the sales effort in the paid search market. Currently we do not feel any impact from the competition.

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