Feb 022011

The Baidu (BIDU) engine shows no signs of stalling.

Shares for China’s dominant online search engine jumped 8% after hours Monday, after the company once again smashed analyst views with its financial results. Its outlook also beat.

The company said revenue more than doubled to $371.3 million from $184.7 million in the year-earlier quarter. Per-share profit minus items but including stock-based compensation soared to 50 cents from 18 cents. Analysts polled by Thomson Reuters had expected EPS of 45 cents on sales of $360.3 million.

Baidu continues to report record revenue and profit as it adds online advertisers and users. It also has gained from a decision by U.S. leader Google (GOOG) — Baidu’s only significant rival in China — to curtail its operations in China over the government’s stringent censorship issues.

Baidu’s sales growth the past few quarters — and potential ahead — may be tops among tech leaders, says Kaufman Bros. analyst Mayuresh Masurekar.

“There are very few companies that can keep growing at a 50%-plus growth rate for multiple years to come, and Baidu is one of them,” he said.

Baidu has been able to capitalize on China’s thriving Internet market, which shows no sign of slowing, CEO Robin Li said in a statement. The company scheduled a conference call with analysts for 8 p.m. Monday EST.

“Baidu continues to build upon our clear leadership in China’s search market,” Li said.

Google’s issues with China also help. Baidu has about a 70% share of the search market in China, while Google has about 24%, down from 33% a year ago.

But Baidu already was dominant in China even before Google’s travails began there, says Scott Kessler, an analyst for Standard & Poor’s equity research services.

“Even if Google had maintained a greater presence (in China), it’s fair to say advertisers would definitely want to increasingly evaluate and potentially commit to Baidu, because they know at least Baidu is going to be there to provide them with solutions,” he said. “In the case of Google, there had been a lot of uncertainty.”

Baidu ended the quarter with 276,000 advertisers, up 24% from a year ago and 1.5% from Q3.

Revenue per advertiser in Q4 was up 56% to $1,348 vs. the year-ago quarter and up 7.2% from the prior quarter.

For the first quarter, Baidu expects revenue of $360.6 million to $371.2 million, up 90% to 96% from the year-earlier quarter. Analysts forecast $354.1 million.

In 2010, the number of Internet users in China reached 457 million, up 19% from 2009, says the Chinese government.

But there’s also an increase in more sophisticated Internet users who use Baidu’s search service, says Masurekar.

“More people are coming online, and out of the people who are already online, there are more people who are searching, ” he said. “And out of the people who are searching, a lot of those are searching more than they used to.”

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