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Baidu shares drop after Q4 forecast
By Ding Yining |
October 27, 2009, Tuesday
|
Online Edition
Online Edition
SHARES of Baidu Inc dropped more than 13 percent in after-hours trading in Nasdaq on Monday after it said income in the fourth quarter will be affected with the switch of its new online marketing platform.
China's biggest search engine provider said revenue for the fourth quarter will be between 1.19 billion yuan (US$174 million) and 1.23 billion yuan, witch corresponds to 32 to 36 percent year-on-year growth. Previous estimates by Reuters analysts were expecting the figure to be 1.38 billion yuan.
Its shares lost 13.16 percent to US$375.99.
"We see a short term negative impact as some customers may stay behind in their spending on Phoenix Nest," Robin Li, chairman and CEO of Baidu, said during a conference call yesterday.
Baidu launched the trial of its new Phoenix Nest technology last year to allow advertisers to increase the monitoring of search results. It is expected to complete the transition from its original online marketing system to the new system by the end of the fourth quarter. It now covers about 70 percent of Baidu customers and contributed 20 percent to its total revenue.
Profit for the third quarter rose 42 percent to 492.9 million yuan, or 14.14 yuan per share. Revenue rose 39.1 percent year on year to 1.28 billion yuan.
The number of its online marketing customers in the third quarter is 216,000, a 11.3 percent increase from the same period last year.
The company has a 61.6 percent market share in the domestic search engine market in the second quarter this year, compared with biggest rival Google's 29.1 percent, according to the Internet consultancy Analysys International.
Baidu has also signed partnerships with both China Telecommunications Corporation and China United Network Communications Group Co to provide wireless search services to mobile phone users.
China's biggest search engine provider said revenue for the fourth quarter will be between 1.19 billion yuan (US$174 million) and 1.23 billion yuan, witch corresponds to 32 to 36 percent year-on-year growth. Previous estimates by Reuters analysts were expecting the figure to be 1.38 billion yuan.
Its shares lost 13.16 percent to US$375.99.
"We see a short term negative impact as some customers may stay behind in their spending on Phoenix Nest," Robin Li, chairman and CEO of Baidu, said during a conference call yesterday.
Baidu launched the trial of its new Phoenix Nest technology last year to allow advertisers to increase the monitoring of search results. It is expected to complete the transition from its original online marketing system to the new system by the end of the fourth quarter. It now covers about 70 percent of Baidu customers and contributed 20 percent to its total revenue.
Profit for the third quarter rose 42 percent to 492.9 million yuan, or 14.14 yuan per share. Revenue rose 39.1 percent year on year to 1.28 billion yuan.
The number of its online marketing customers in the third quarter is 216,000, a 11.3 percent increase from the same period last year.
The company has a 61.6 percent market share in the domestic search engine market in the second quarter this year, compared with biggest rival Google's 29.1 percent, according to the Internet consultancy Analysys International.
Baidu has also signed partnerships with both China Telecommunications Corporation and China United Network Communications Group Co to provide wireless search services to mobile phone users.
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