DOW JONES NEWSWIRES
Baidu Inc.'s (BIDU) fourth-quarter net income rose 31% as its
number of online-marketing customers surged.
But Baidu, which holds a commanding share of the Internet-search
market in China, noted late last year that China's economic
slowdown was having a greater-than-expected effect on online
marketing, especially in machinery and franchising.
The company reported net income of $42.3 million, or $1.22 per
American depositary share, up from $32.2 million, or 93 cents per
ADS, a year ago.
Excluding stock-based compensation costs, earnings were $1.31
per ADS.
Analysts polled by Thomson Reuters projected $1.32.
Revenue rose 58% to $132.2 million, in line with the company's
lowered December forecast of $131 million to $133 million.
Active online-marketing customers rose 27% to more than 197,000,
as revenue per customer grew 24%.
Baidu has been losing some of its market share as competition in
China's search-engine market has been intensifying, including a
push by Google Inc. (GOOG) to localize its strategy for the Chinese
market. Baidu is facing additional pressure from China's government
to clearly differentiate sponsored links from unpaid search
results, a less lucrative business model which, unlike Google, it
doesn't do.
The company expects first-quarter revenue of $114 million to
$117 million, compared with Wall Street's expectation of $117
million.
Baidu's shares fell 2% to $125.50 in after-hours trading. The
company's shares have lost nearly two-thirds of their value from a
52-week high in May, leading some analysts to suggest the shares
might be a good buy at the cheaper price.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com