China’s largest Internet search engine benefited from the booming advertising business in the country. In the second quarter, Baidu has doubled its net profit. Investors reacted delightedly: After the close of trading, its share price jumped by seven percent.
The Internet search engine Baidu reported for the second quarter, a surprisingly high profit. The net profit had doubled in the second quarter to the equivalent of nearly 253 million dollars, said Google’s rival on Monday. Revenue increased by 78 percent to 528 million U.S. dollars. Both figures exceeded market expectations.
The revenue forecast of 611-627 million dollars for the current quarter is higher than the forecasts of analysts. Baidu’s shares soared in after-hours business by seven percent in Nasdaq.
For the online advertising business in China, where the company controls two thirds of the market, growth rates are predicted by some 45 percent a year. Some industry experts assume, however, that the companies reduce their advertising budgets because they adjust to slower economic growth in China.
To keep important customers, Baidu has simplified its advertising platform. The Chinese company also increasingly focused on the business of online video, and electronic commerce. In traditional search business Baidu has benefited from the fact that Google has cut back after a dispute with the government in Beijing over the Internet censorship of its activities in China.