(Updates with CEO’s comments in second paragraph.)
Feb. 17 (Bloomberg) -- Baidu Inc., owner of China’s dominant search engine, expects strong growth in demand for its mobile services this year, after computer-based operations drove a better-than-expected increase in fourth-quarter profit.
China’s mobile Internet market is growing at an “astonishing pace,” Chief Executive Officer Robin Li said on a conference call today. Baidu will step up efforts in generating sales from mobile services, which make up a small percentage of revenue at present, he said.
Baidu’s stock rose in extended trading after the company yesterday reported net income climbed 77 percent, boosted by a surge in advertising sales. The Beijing-based company plans to generate more sales from social-media services and is seeking “long-term international opportunities,” Li said today.
About 15 percent of the search queries handled by Baidu now come from mobile users, Li said. The chief executive didn’t provide targeted revenue figures for mobile services.
Baidu’s American depositary receipts, each representing 0.1 share, advanced 2.5 percent to $141.83 on the Nasdaq Stock Market yesterday before the earnings announcement, and gained 1 percent to $143.25 in extended trading.
Fourth-quarter net income climbed to 2.05 billion yuan ($325 million), or 5.87 yuan per ADR, from 1.16 billion yuan, or 3.32 yuan, a year earlier, Baidu said in a statement. That exceeded the 2 billion-yuan average of 10 analyst estimates compiled by Bloomberg.
Revenue, almost all from online sales, jumped 83 percent to 4.47 billion yuan in the quarter ended Dec. 31. Advertisers increased spending to buy keywords as Baidu extended its lead over Google Inc. in China.
First-quarter revenue will increase as much as 78 percent, to between 4.2 billion yuan and 4.33 billion yuan, Baidu forecast. Analysts project sales of 4.23 billion yuan, according to the average of 10 estimates compiled by Bloomberg.
The company accounted for 78.3 percent of China’s search- engine market by revenue last quarter, rising from 78.2 percent in the previous three months, according to Analysys International. Google’s share dropped to 16.7 percent from 17.2 percent, the research company said.
Google has been losing ground in China’s search-engine market since January 2010, when the Mountain View, California- based company said it was no longer willing to comply with Chinese regulation to self-censor Web content. Two months later, Google shut its Google.cn service and redirected Chinese users to its site in Hong Kong.
Robin Li is China’s second-richest man with a fortune of $9.2 billion, according to Forbes Asia.
--Editors: Lena Lee, Suresh Seshadri
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