Baidu.com "The Chinese Google" Soars

From software to hardware, breakthough to disaster, it all belongs here!

Moderator: CricketMX Forum Moderators

Post Reply
User avatar
moongirl
Moderator
Moderator
Posts: 19016
Joined: Mon Jan 12, 2004 8:07 am

Baidu.com, the maker of China's leading Internet search engine, mesmerized Wall Street on Friday as its stock more than quadrupled -- a dazzling debut driven by the company's connections to Google as much as its own tantalizing potential.

The Beijing-based company's shares closed at $122.54 on the Nasdaq stock market, a 354 percent gain from its initial public offering price of $27. That represented the biggest one-day gain since the final days of the dot-com, when IPOs regularly soared.

No IPO has climbed as high on the first day of trading as Baidu did Friday since the shares of software maker Selectica soared 371 percent during their March 2000 debut, according to IPOhome.com. Selectica's shares closed unchanged Friday at $3.15 on the Nasdaq.

The rapid run-up gave Baidu (pronounced by-doo) a market value of $4 billion -- a lofty appraisal of a 51/2-year-old company that only recently became profitable. Baidu earned $1.8 million on revenue of $13.6 million during the first half of this year.

The company's management expects much bigger things as more of China's vast population surfs the Internet. Of China's 1.3 billion residents, more than 100 million surf the Web. Baidu has been able to pluck enough visitors from that audience to emerge as the world's sixth-most-trafficked Web site.

"I am very confident in the future of Internet search in China," Baidu Chairman Robin Li said. "This is a very basic need for every consumer in China."

Googlemania played a major role in Friday's buying frenzy. As the early search-engine leader in China's nascent Internet market, Baidu is inspiring comparisons to Google Inc., which quickly evolved into a cultural and financial phenomenon by becoming the Web's leading guidepost.

Like Google, Baidu -- traded under the ticker symbol BIDU -- so far has made most of its money from text-based ads that are tied to search requests and generate a commission when the links are clicked.

Nearly a year ago, Google went public at $85 per share -- a price that many investors viewed as inflated but now looks like a bargain with the company's shares closing at $292.35 Friday.

Drawn by Baidu's potential, Google paid $5 million last year for 749,625 of the company's shares -- a stake worth $92 million Friday.

Google's early ownership interest has convinced some investors that it will eventually buy Baidu, although there has been nothing concrete to support that belief.
http://www.suntimes.com/output/tech/cst ... ain06.html
Image
That's not the man in the moon...that's me ;)
Post Reply