Robin Yanhong Li, CEO of Baidu
Baidu, whose name is practically synonymous with Internet search in China, surprised investors when it revealed transition to its new Phoenix Nest system will lead to softer revenues into next year as customers adjust, sending its stock down sharply.
The news was music to others, such as Sina Corp and global search leader Google, looking for a bigger piece of the pie in the world’s biggest Internet market with 235 million search users in June, up about a third from a year ago.
“In the short term, Baidu could possibly lose market share to Google,” said JP Morgan analyst Dick Wei.
“From the end user perspective, they aren’t going to see much of a difference, but from the advertisers perspective, if you look at monetization market share, it (Baidu’s market share) could be a bit lower in the next few months,” he said.
Baidu expects to lose some customers and have lower revenue in the near term after the system is fully rolled out.
Baidu shares, which shed 0.5 percent to close at $432.97 during regular trading hours in New York, fell over 13 percent in after-hours trade to $375.99 after the company gave its revenue forecast that was well below Wall Street estimates. read more at ChinaDaily.com…
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