According to recent reports, the Internet population in China is more than 500 million – that is nearly twice the Internet population of the United States. Analysts believe that China’s online market is a big growth opportunity, especially considering that the country has a total population of over 1.4 billion. Chinese Internet players have been reaping these benefits.
Baidu’s (Nasdaq:BIDU) Q4 revenues grew 91% over the year to $710.1 million, ahead of the Street’s targeted $706.6 million. EPS of $0.93 was also ahead of the market’s expected EPS of $0.90.
Baidu’s search share in China continued to grow and now accounts for 78.3% of the market, compared with 75.8% reported last quarter. Google was a distant second with 16.7% market share. Baidu’s investments in mobile technology are paying off as they saw 15% of their traffic emerge from mobile devices.
For the current quarter, Baidu projected revenues of $666.5 million-$688 million as it continues to push toward higher adoption of mobile search. The market was expecting revenues of $678.8 million.
Baidu Grows with Microblogs
Baidu recently ventured in the microblog space to begin listing real-time content from microblog content provider, Sina Weibo. In addition, their search results will include content from other microblog services, including Tencent Holdings, NetEase.com, and Sohu.com. This move is expected to help Baidu expand within the growing social networking market.
Baidu’s International Growth
As part their aim to expand their geographic footprint, Baidu announced plans to set up a research facility in Singapore. The facility is a joint venture with Singapore’s Agency for Science and Technology Research and will develop products designed for the Southeast Asian market. They will be focusing on research in technologies for services in Thai and Vietnamese. Earlier last month, Baidu also announced plans to launch in the Brazilian market. They began work there by setting up an office to compete with Google. At present, Google has 90% of the Latin American search market share.
Baidu’s Cloud Expansion
Baidu recently hosted a conference to introduce to developers their version of Dropbox. Known as WangPan, the service lets users store files free and access them on multiple Android and PC devices. Baidu will let users access 15 GB on WangPan free and will charge for use of additional space. They are also working on enabling the service for use on iOS devices.
The stock was trading at $144.62 with a market capitalization of $50.6 billion. It touched a 52-week high of $165.96 in July 2011.
Alibaba’s (HKSE:1688.HK) revenues for the year ended December 2011 grew 16% over the year to 6.42 billion yuan (~$1.01 billion). EBITDA of $1.94 billion yuan (~$0.31 billion) grew 22% over the year. Revenues for Q4 grew 9% over the year to $1.66 billion yuan (~$262 million), with EBITDA growing 33% over the year to 528.9 million yuan (~$83.54 million).
International marketplace registered users grew 7% over the year for the quarter to end with 25.5 million users, and China marketplace users grew 4% over the year to 50.8 million users. Overall storefronts grew 5% over the year to more than 10 million. Although overall users may have grown, Alibaba saw a 3% drop in paying members over the year to more than 765,360 users.
Alibaba Looking to Become Private
Alibaba’s chief executive, Jack Ma, has been looking to acquire Yahoo since the Internet giant’s future became uncertain. Recently, Ma’s firm and Alibaba.com’s parent firm, Alibaba Group, has been working toward making Alibaba.com a private player. The group has offered Alibaba.com’s investors HK$13.50 (~$1.74) cash to make the entity private. This was the same price at which the company had listed on the Hong Kong Stock Exchange in 2007. Ma claims that the transaction has nothing to do with their working on the Yahoo deal. Instead, he claims that by taking the company private, they will be able to focus more on growth without feeling the “pressures that come from having a publicly listed company.”
Alibaba’s stock is trading at HK$13.20 (~$1.70), taking its market capitalization to HK$66.05 billion (~$8.51 billion). It touched a 52-week high of HK$14.84 (~$1.92) in April 2011.