Lam Ching Johnny 2008060135
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Chinese-language Search Engine
NASDAQ: BIDU
2005 IPO price: US$27
Current stock price: US$609.50
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2010
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4 January 2010 stock price: US$410.03
Current stock price: US$609.50
YTM: about 50%
Business overview
- serving 3 types of online participants
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Users
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Chinese language internet search services
community-based products and entertainment platform
e.g. Baidu Post Bar, Baidu Knows, Baidu Space

Customers
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online marketing services
e.g. auction-based Pay for Performance (P4P) services
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Baidu Union Members
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third-party web content and software providers
Search Engine Market Size in China
By 31 December 2009:
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China Internet users: 384,000,000 > US population
- 28.9% annual growth rate
Total search engine users: 280,000,000
- 38.6% from the previous year
Search engine market: RMB 6.95 billion
- 38.2% from the previous year
Source: China Internet Network Information Center(CNNIC)
Internet Statistics 2009
Search Engine Market Share Distribution in China
By 31/12/2009:
Others
(Sogou, Yahoo
China, Youdao, etc)
Market Share
YoY change
76.0%
+2.8%
18.9%
(1.8%)
5.1%
(1.0%)
Search engine in
China
Market share 2009
Baidu
Google
Others
Search Engine Market Share Distribution in China
> > After 22/03/2010 > > >  
Others
(Sogou, Yahoo
China, Youdao, etc)
Market Share
YoY change
76.0%
+2.8%
18.9%
(1.8%)
5.1%
(1.0%)
Search engine in
China
Market share 2009
Baidu
Google
Others
Search Engine Market Share Distribution in China
> > After 22/03/2010 > > >  
Market Share
YoY change
76.0%
+2.8%
Google.cn 
Google.com.hk
Others
(Sogou, Yahoo
China, Youdao, etc)
5.1%
(1.0%)
Search engine in
China
Market share 2009
Baidu
Google
Others
Baidu
Search
results
Dominance
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Google.cn  Google.com.hk
Ranks phonetic alphabet for
Mandarin (Pinyin) better
Google.com.hk does not rank Pinyin
Paid results (a lot)
displayed before natural results
(Less than 3) paid results displayed
before Natural Results
Human intervention on search
result is highly likely
Less Human Intervention on
Higher share of search on
Higher share of search on
Countryside
Big Cities
search result
Growing internet access in Countryside
 More Baidu users
Summary
 Growing
market size of search engine
 Growing market share of Baidu
 Exit
of major competitor: Google China
(redirects to Google Hong Kong)
 Growing internet access in countryside
 Recommendation
 Buy
Thank You