Search Engine Optimization Solutions
Search Engine Optimization Search Engine Optimization Search Engine Optimization Search Engine Optimization

Sitemap Aug-Archive-05 Chinese Google Rocks Stock Market

Chinese Google Rocks Stock Market  

Chinese search engine Baidu's stock soared some 350 percent on its debut. But powerful competitors like Google and MSN are moving in on its turf. Within an hour after it made its arrival on the Nasdaq, the share, traded as a certificate of deposit, had already tripled its value, and some analysts nicknamed it the "Chinese Google." The certificate ended its first session at $122.54, almost five times its $27 starting quote. It was the first time a share finished its first session above $100 since Google began trading in 2004.

The jump in the company's valuation was caused largely by its associations with Google. Reports in recent weeks have suggested that the search giant was interested in acquiring its Chinese competitor, which undoubtedly attracted investors to Baidu's IPO. Google already owns a 2.6 per cent stake in the company. That investment might once have been meant as a stepping stone to a bigger Google stake in the Chinese concern, but now it seems that Google has other plans.

Baidu has a close resemblance to Google. The Chinese portal has a similarly designed no-frills search page and makes its money from selling text-based advertising.

With such an explosive performance, Baidu's debut is similar to those that debuted in 1999. And just as the dot-coms that rocketed upward in those days of the Internet bubble quickly fell to earth, Baidu is getting a big short-term boost from investors who have fallen in love with a good story.

In Baidu's case, the cause for the exuberance is the booming Chinese Internet market. The country has over 100 million people online, making it the second-largest Internet market worldwide, behind only the United States. And there's plenty of room for more growth. In the first half of 2005, the market expanded 18 percent. And the number of Net users is still tiny compared to the number of Chinese consumers who use mobile phones — over 360 million. Many of those people use their cellular handsets to access the Net, providing Chinese dot-coms with an even bigger audience than just those who stick to PCs.

Baidu stands a good chance of winning big as all those Chinese Net surfers look for help navigating the Web. But amid the hype surrounding the Baidu IPO, it's worth remembering that the company is going to face a lot of obstacles, too.

However, Google might be off to a slow start in China, but it clearly has the brand and the technology to leap ahead quickly. Google is already one of the most popular search engines among Chinese Net surfers. Once Google gets its act together and makes a big push in China, which no doubt it will, Baidu will have its work cut out responding to the threat.

While Microsoft is trying to stymie Google in China, Bill Gates may turn out to be another big competitor to Baidu. MSN, the Microsoft portal, earlier this year launched a joint venture with an investment company in Shanghai and it probably won't be long before MSN becomes more aggressive in trying to lure away users from Baidu. Yahoo! is a threat, too, thanks to its acquisition of a Chinese search engine in 2003.

Baidu, its name inspired by an ancient poem, refers to a quest for the ideal. Now five years old, it is the sixth most visited site worldwide, and second in China.

Back to Synopsis 

© Copyright 2004 ePromotionz. All rights reserved.