China's Baidu (BIDU) and underwriter Goldman (GS) "far apart" on valuation

| About: Baidu, Inc. (BIDU)

Google-backed Chinese Internet search company (ticker: BIDU) is planning an IPO in Fall 2005. Baidu and Goldman (ticker: GS) are reportedly far apart on valuation. Baidu is looking for a market cap of $1 billion, and Goldman, suggesting around a third of that. The IPO would be the first for a pure-play Chinese search engine company. Here is a quick profile:

Baidu's business:

  • Paid search.
  • Charges customers about .30 RMB or less than $0.04 per click-through.
  • 70% of revenue from paid search.
  • 15-20% of revenue from generic, non query-sensitive text links.
  • Search solutions for enterprises account for the rest.

Search market share (from iResearch):

  • Baidu: 44.7%
  • Google: 30.1%

Financial information:

  • Baidu has not released financials.
  • The company is reportedly profitable.


  • Draper Fisher Jurvetson, IDG, Peninsula Capital, Integrity Partners, ePlanet Venture, Bridger Management, China Equity, China Value and Venture
  • Google (ticker: GOOG) invested in Baidu’s Series C round, and bought a 10% stake at a valuation rumored around $100 million in mid-2004.

Baidu's origin:

  • In Chinese, Baidu means "a hundred times".
  • Baidu takes its name from a 12th-century Song dynasty poem about searching for a beautiful woman amidst the teeming masses.