Baidu (BIDU) is forging ahead. The company provides Chinese-language Internet search services. It also offers search platforms for businesses to network with their customers. Baidu provides music products, mobile-related solutions and other web-related products. This Beijing-based company also offers products and services for developers.
Numbers at a Glance
Baidu is the leading Chinese-language Internet search provider. In its fourth-quarter earnings, the company’s total revenues in fiscal 2013 were $5.27 billion, a 43.2% increase from 2012. Its operating profit in 2013 was $1.84 billion, a 1.3% increase from 2012. The company’s net income in 2013 was $1.73 billion, a 0.6% increase from 2012.
In fiscal 2014, the company expects to generate total revenues in an amount ranging from $1.52 billion to $1.57 billion for the first quarter of 2014. This represents a 54.8% to 59.5% year-over-year increase. The company however expects to leverage its network to extract even more growth. It expects its TAC as a percent of revenues to increase over the near term.
In 2013, Baidu made significant progress in the development of its mobile sector. At the beginning of the year, its customers were not very aware of the company’s mobile search channel. By the end of the year, over 60% of its customers had a mobile optimized landing page. Consequently, mobile contributions to the company’s top line now account for 20% of total revenues in the fourth quarter compared to about 10% in the second quarter.
The company’s addition of Nuomi to its ecosystem brought it a huge strategic value in the last year. In fact, Baidu closed its majority investment in Nuomi at the start of the fourth quarter. Baidu hopes to make a gain from combining its massive user base with Nuomi’s expertise in group buying.
Also, Baidu made huge strides in 2013 in the app distribution sector. By the end of the year, Baidu had 14 apps. The apps had over 100 million activated users. According to Analysis Research, Baidu led the Chinese app distribution market with a 41% share.
Head to Head
Baidu faces stiff competition from Qihoo (QIHU) and Sohu (SOHU). Compared to its peers, Baidu has operated for a longer period in the Chinese market. This means the company has more data than its rivals. It can use it to take them out of the game.
In addition to its search business, Baidu is strategically focused on expanding its international operations. It is leveraging its strength in the sector to exploit the numerous opportunities open to it.
A Passage to Thailand
Baidu plans to launch its search engine in Thailand. The company hopes to develop a Thai- language version. Baidu is also expanding its office in Bangkok. Needless to say, Baidu has been active in Thailand since 2012. The company has launched several products in the Asian country.
The expansion into Middle-East and Africa
Baidu has also announced an agreement with the French firm Orange. The agreement concerns the inclusion of Baidu’s browsers on Orange phones in the Middle-East and Africa. The project started off in Egypt. Baidu’s strategy is to design products appropriate for low-digital literacy markets.
On a Concluding Note
Baidu has made a significant progress in its focus areas. It now holds leading positions in the Chinese mobile search, app distribution and location-based sectors. It is also continuing to invest in value-added businesses. This could bring more shareholder value in the future. Overall, Baidu has a strong financial position. It also has enough potential to become successful in its international expansion. Baidu will provide good results in the near term.