Chinese search engine Baidu Inc stated a week ago that it benefited from Google’s partial exit from the country and anticipates more customer gains in the next few quarters.   Robin Lee, chief executive of Baidu, said the company benefited from Google’s decision to move its search engine to Hong Kong last month. “We have seen more confidence and higher customer loyalty since the end of last quarter,” Lee said during a conference call on Thursday.   Baidu also benefited from the overall market growth and the deployment of its new online advertising platform “Phoenix Nest”.

Baidu’s profit more than doubled in the first three months of this year. Net income for the period rose to 480.5 million Yuan ($70.4 million) from 181.1 million Yuan a year ago, while Google’s decision to withdraw resulted in most of its advertisers reducing spending by about 30 percent.   According to Analysis International, Google’s market share in China fell to 30.9 percent in the first quarter from 35.6 percent three months earlier. Baidu’s market share rose to 64 percent from 58.4 percent, the Beijing-based research firm said.   The search engine market share is based on revenue, rather than user numbers.  Access to Google’s new site in Hong Kong has been normal for most mainland users. Google’s other services, such as maps, video and music search are also functioning normally.    Source: China Daily

BIIA Newsletter May I – 2010 Issue