David Ingles discussed with Angie Lau about Baidu Inc (ADR) (NASDAQ:BIDU)’s second quarter earnings and new areas of focus for the company on Bloomberg TV’s “First Up.”
Baidu Inc (ADR) (NASDAQ:BIDU)’s second quarter net income rose by 35% on the year to $572.5 million. The revenues grew by an annual 58.5% to $1.94 billion. China’s largest search engine company forecasted revenues in the range of $2.16 billion – $2.22 billion for the next quarter.
Ingles noted that the company was investing in newer areas, especially mobiles, as the company sees more sales and revenue being generated from that space in the future. In fact Baidu Inc (ADR) (NASDAQ:BIDU)’s current quarter results were boosted by higher mobile ad sales. “For the first time ever, mobile revenue now makes up 30% of total revenue,” Ingles quoted Robin Li, the Cofounder, Chairman and CEO of Baidu Inc (ADR) (NASDAQ:BIDU).
However, Ingles feels that this is quite limited considering the potential of mobile phone business which includes mobile search, mapping and app distribution. And China is a very potent market for it with 83% of their huge 632 million users accessing the internet via mobile phones, as per a report released by China Internet Network Information Center earlier this week, he said.
Further, Baidu Inc (ADR) (NASDAQ:BIDU) had invested $280 million in research and development, which was 85% higher than the previous year investment to develop mapping, search apps and such new technologies. Ingles considers this as a good indicator of where the company is heading, and endorses it given that the internet is fast becoming a dominant platform for a range of activities like shopping, video sharing and travel.
Baidu Inc (ADR) (NASDAQ:BIDU) currently leads the Chinese search engine market with a 76% market share, followed by Qihoo 360 Technology Co Ltd (NYSE:QIHU), which has 16% share, while Sogou and others make up a minuscule 5% and 3% respectively, as per the Bloomberg Intelligence data for the first quarter.