Baidu: China's Leading Search Engine

            
 
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Case Details:

Case Code : BSTR293
Case Length : 19 Pages
Period : 2002-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Baidu.com, Inc.
Industry : Internet Software
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"We believe in local markets; we believe that the search engine is not a pure technology phenomenon, but has close ties with culture and language. We understand the Chinese language and culture better, therefore can deliver the best user experience for Chinese users. If we ever get into other markets, we will run a very local team with local servers too. This is our true differentiator in China."

- Robin Yanhong Li, Chairman and CEO of Baidu.com, Inc., in 2004.

"Baidu's local know-how and attentive customer service create barriers for its competitors. We feel that Baidu was able to extend its lead over its peers by leveraging its strong sales support to advertisers and/or agencies. This customer-centric strategy enables advertisers to get greater control of their marketing programs, thus creating demand for Baidu's services over its competitors."

- James Lee, Analyst, WR Hambrecht , in 2006.

"Baidu has established a relatively narrow economic moat around its brand that could eventually be eroded."

- Haibo Zhang, Research Analyst at Morningstar, Inc. , in 2006.

China's Google?

On April 24, 2008, China-based Baidu.com, Inc. (Baidu) the leading Chinese language Internet search engine, announced its financial results for the first quarter ended March 31, 2008.

Its total revenue for the quarter was RMB574.4 million (US$81.9 million) , an increase of 108.4% over that of the first quarter of 2007.

Operating profit was recorded at RMB 147.4 million, and it grew by 99.6% over that of the corresponding period of the previous year (Refer to Table I for the key financials of Baidu for the first quarter of 2008 and the first quarter of 2007).

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1] Bambi Francisco, "Baidu's CEO Builds up for IPO,"www.marketwatch.com, June 18, 2004.
2] David Temple, "China's Leading Search Engine Baidu Reaches 52 week High,"www.multilingual-search.com, November 17, 2006.
3] WR Hambrecht is a financial services firm that provides advisory services and equity research for emerging companies. It is headquartered in San Francisco, USA.
4] Haibo Zhang, "Growth at Risk -Baidu.com ADR,"Morningstar, 2006.
5] Morningstar, Inc. is an investment research company based in Chicago, Illinois, USA.
6] "Baidu Announces First Quarter 2008 Results,"www.ir.baidu.com, April 24, 2008.


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