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Article

Title: BAIDU BUZZ

Author: White, George Article Type: Company
Source: The Deal, v4 n21 p31(1) Publication Date: May 8, 2006
  ISSN: 1541-9878
URL of Publication: http://www.thedeal.com

Baidu.com created a buzz in 2005 as it almost duplicated the success of Google when it started trading on the stock market. Baidu is a Beijing, China-based Internet search engine offering services similar to that of Yahoo! and Google. Baidu provides Chinese search results as well as news, images and multimedia files. In August 2005, its initial public offering (IPO) rose 357 percent from an initial price of $27 per share, but after a high of $153.98, it sunk to $62.92 at the end of 2005. Interest in the Chinese search engine began when Google invested in the company, acquiring a 5 percent stake in 2004. The purchase led many to speculate that Google is planning an eventual takeover of the company. There are various reasons that could have led to the drop in the stock price. When Baidu launched its IPO in 2005, Yahoo! announced that it is investing $1 billion in Alibaba.com, a Chinese online company. Investors also worried about the potential growth of Baidu in a market where Internet advertising has not yet popular. In 2005, Baidus profit was only $5.9 million. China has yet to recognize the benefits of online advertising, although in the next five years, it is estimated that online advertising in China will probably increase to around $4 billion to $5 billion.

Companies:
Baidu.com Inc

Products:
China

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