- Search/security software/app store rivals Baidu (BIDU +5%) and Qihoo (QIHU +4.3%) are each surging to fresh 52-week highs. Qihoo, now up over 3x YTD, is also making new all-time highs (Citron Research can't like that).
- Citi, which upgraded Baidu to Neutral on July 16 and Buy on Aug. 9 after issuing very bearish commentary earlier this year, says its research indicates the ratio of ad clicks to queries on mobile devices is half the ratio for PCs, a level it deems better than expected.
- Citi also theorizes "paid clicks on smaller mobile screens are more likely to be clicked by users, given the limited number of search results displayed on the smaller screens," and that this compensates for lower keyword coverage by advertisers. Of course, accidental clicks could also contribute to higher mobile click rates.
- Citi now has a $167 PT on Baidu, equal to 25x 2014E EPS.