Baidu: Riding the Chinese Internet Dragon

Last Tuesday night, Robin Li, CEO of Baidu.com (BIDU), came and shared with us the Baidu story. At the beginning of the event, led by Qi Lu, Executive Vice President of Yahoo and President of HYSTA, we had a special moment dedicated to these deeply affected by China earthquake that devastated thousands of people in Sichuan Province, China.

Baidu.com, as the No.1 web site in China, has acted quickly, helping people save lives and donate for quake victims. The same night, along with a 2 million RMB donation, Robin urged the company to use its unbelievable penetration, including millions of Chinese web surfers and thousands of affiliates, to help those devastated by the quake. One amazing story was about a female student, Qi Zhang, who helped military find the best helicopter landing spot near the epicenter by posting online. It simply reflects how the Internet is shaping China and how Baidu is riding the China Internet dragon better than ever.

Let's review some basic facts. China reached the magic mark at the end of February this year: With 221 million Internet users, China surpassed US to become the No. 1 country in Internet users. However, the Internet penetration in China is only 16 percent – below the world average of 19.1 percent, and well below that in US of approximately 50 percent. Maintaining 70% of the search market share in China, Baidu.com has another 3125% to grow when the Internet penetration rate in China reaches 50%. No wonder Baidu.com's stock is very hot in NASDAQ.

As Robin pointed out in his speech, China annual GDP growth is about 8% ~ 9%, advertisement revenue in China grows at 15% ~ 20%, online advertisement doubles overall advertisement revenue with the yearly growth rate at 40%, China search market advances with a 80% year-to-year growth, and Baidu tops all at 160%.

Robin's success wasn't simply serendipitous. His focus is dead-on: search. He has worked in search since college. As a staff engineer at Infoseek, he wrote a book in Chinese in which he analyzed business cases in the late-'90s IT industry. The success of Baidu.com is his to lose. Let's expect Baidu.com to achieve more successes under his lead in China as well as in Japan.

Disclosure: No position

Comments

[weng ho teng:]

My condolences and best wishes to the great Chinese people. It is a time of sadness and inspiration. May God bless you all.

Baidu is a fabulous company. A crown jewel of the new China.

May I also point out that China Netcom's partner MYST.OB is also a great company to watch in the coming months.

MYST.OB is about to launch Subaye English B2B site. A direct competitor to Alibaba English. \

Certainly, MYST.OB should be watch closely.

2008 May 19 03:36 PM

[Spejbl:]

212,5% not 3125%

2008 May 22 04:00 AM

[Chinaflowers:]

We believe Baidu has great potential and following Google's lead but in China. As Payment becomes more accessible in China, this will only help increase the bottom line for Baidu. We, Chinaflowers.cn also have benefit from Baidu's search engine. We are also donating flowers to Sichuan and also providing a free flower service sending free flower bouquets to those who know friends or have family in Sichuan.

2008 May 29 11:32 AM