The Wall Street Journal-20080215-Baidu Posts Rise in Net- But Trims Its Outlook

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Baidu Posts Rise in Net, But Trims Its Outlook

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Baidu.com Inc.'s fourth-quarter net income soared 79% as online- marketing revenue increased, but its forecast for first-quarter revenue fell slightly below analysts' expectations.

Baidu, China's largest Internet-search engine and known as the "Google of China," posted net income of 219.8 million yuan ($30.5 million), up from 122.8 million yuan a year earlier. Revenue more than doubled to 571.1 million yuan. "Our efforts were rewarded by increases in our user traffic and expansion of our market share, further strengthening our position as the leader in Chinese-language search," said Chief Executive Robin Li.

Online-marketing revenue more than doubled, helped by a 44% rise in the number of active online-marketing customers to more than 155,000, and a 48% gain in revenue per customer.

Baidu reduced its first-quarter revenue forecast amid concerns about the impact of recent snowstorms in China. It now expects revenue of between 533 million yuan and 548 million yuan ($74 million to $76 million). Analysts had forecast $77 million.

The company's American depositary shares were up 4.6% at $273.18 in early trading Thursday on the Nasdaq Stock Market. The shares were down 37% from their 52-week high of $429.19 struck Nov. 6.

Mr. Li said Baidu plans to launch an online-auction service this year but doesn't plan to generate revenue from it. Baidu would compete against Alibaba.com Ltd., which dominates the online-auction market in China. Alibaba Group, 39%-owned by Yahoo Inc., is the parent of Alibaba.com and operates Yahoo China.

Baidu holds a 60% share of China's Internet-search market, according to research firm Analysys International, helped by searches for free, unlicensed music downloads. U.S. search giant Google Inc. has a 26% share. Music companies earlier this month filed lawsuits in a Beijing court accusing Baidu and other Web sites of aiding illicit online copying. Mr. Li said Baidu is unlikely to list shares in Hong Kong this year, saying the plan is at a preliminary stage.

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Terence Poon contributed to this article.