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Baidu income increases fivefold in fourth quarter

China's leading Internet search engine, Baidu.com Inc (百度), reported a fivefold increase in fourth-quarter net income as online marketing revenue more than doubled.

The company's first-quarter revenue forecast fell short of Wall Street estimates, though company chairman and CEO Robin Li (李彥宏) attributed that to the Lunar New Year and a transition to direct sales advertising.

Fourth-quarter earnings grew to 122.8 million yuan (US$15.7 million), or 3.54 yuan per American Depositary Share (ADS), from 24.5 million yuan, or 0.71 yuan per ADS, during the prior-year quarter.

Baidu, which holds more than 60 percent of the Chinese Internet search market, plans to spend US$15 million this year to expand into Japan, Li said.

Baidu's revenue more than doubled to 271.3 million yuan in the fourth quarter, from 114.9 million yuan during the year-ago quarter. Online marketing revenue more than doubled to 269.9 million yuan.

Analysts expected revenue of US$34.9 million.

The number of active online marketing customers grew 6 percent to more than 108,000. New products included Baidu Blog Search and Baidu Favorites.

During the quarter, Baidu.com expanded its entertainment business, launching a venture with EMI Music to let users listen to streaming music for free, and another with Viacom Inc's MTV Network, to distribute music videos and other programming online.

Li said Baidu was open to potential acquisitions or investments as it expands in the news, music and online video fields but had no specific news to report at the moment.

The company said it expected first-quarter revenue between 265 million yuan and 275 million yuan, while analysts projected revenue of US$38.9 million.

Shares fell sharply in the after-hours session following the news but then rose 60 cents to US$115.60 from the regular session close of US$115 on the NASDAQ.
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