Shares of Baidu.com Inc. (NASDAQ:BIDU) shot up on Friday after the company’s third quarter results beat the Street.
The Chinese-language Internet search provider also issued a better-than-expected outlook, since this past quarter was hit by a one-time government shutdown of Web sites ahead of China’s Peoples Congress, Citigroup (NYSE:C) analyst Jason Brueschke said in a note to clients.
Baidu’s push into the consumer-to-consumer (C2C) market is not a concern for the analyst. Although he admits it’s not a good idea to pick a fight with TaoBao, the dominant C2C platform in China (an online auction site owned by Alibaba, which is partly owned by Yahoo (YHOO)), he also noted that Baidu management said it would not spend excessively on this project.
So, look for a limited impact on the company’s margins in the near-term, Mr. Brueschke said, noting that more moves like this could signal the beginning of a true community for small and medium-sized enterprises.
The analyst hiked his price target to $425 from $250, while maintaining a “buy” rating on Baidu shares.