Chinese Search Giant Baidu Warns on Slowing Growth
It appears that Baidu is following in Google’s footsteps in more ways than one: its search growth is slowing. As companies become larger high percentage growth rates becomes harder to achieve and sustain.
According to a report appearing in Reuters a Baidu senior executive told an investment conference that growth will “moderate” during 2011. Investors send Baidu shares down yesterday after the remarks became public:
Baidu shares fell $6.42 to close at $100.42 on the Nasdaq after the comments. They had soared more than 160 percent this year after the firm’s main competitor, Google, said it would shut its China search page after a serious hacking episode and on censorship concerns.
Baidu controls 73 percent of the Chinese search market and has ambitions to expand outside of China. Baidu wants to expand horizontally and globally, into games, e-commerce, online payments and online video.
The company also wants to take Baidu abroad and possibly beyond Asia. Baidu founder Robin Li recently told BusinessWeek that he wants Bauidu to become a global internet power:
I hope in ten years, Baidu will become a household name in 50 percent of the world. Sooner or later you will see a China-based company that really has a global impact and I think Baidu has a chance to become one of those companies. We should be able to compete on a global basis.
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