Baidu’s third-quarter earnings jumped 42% (Q3 revenue about USD 187.3 million; net profit about USD 72.2 million) as it continued to gain traction with its new Phoenix Nest online-marketing system. However, Baidu’s updated its revenue projection for Q4 to $180 million, well below the $205 million expected by Wall Street.
Q4 projection is not a surprise to me as Baidu is switching all customers to Phoenix Nest from Dec 1, 2009, which is similar to Google’s AdWords. Currently, about 70% of Baidu customers are using Phoenix Nest system professional edition while a classic edition exists which is Baidu’s old keyword bidding system. As the new phoenix nest system will separate sponsored search results from natural search results, it would no doubt affect its Q4 earnings.
A recent Chinese government report predicted that Baidu’s dominance over Google will continue to grow because Baidu is more popular among new Internet users in the country, who often come from rural areas.
Mobile search is rising and Baidu is working hard to develop new mobile services. Last week, it announced a search deal with local carrier China Unicom.
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