Baidu Inc. (ADR) (NASDAQ: BIDU) is Beijing, China-based Chinese-language Internet search provider. The company operates in China through its wholly owned subsidiary, Baidu Online Network Technology. The company also owns a Japanese search engine.
Baidu has lately been in news because it is search engine giant Google Inc.’s (NASDAQ: GOOG) main competitor in China. With 400 million Internet users, China is a very big market for Internet search providers. Google, of course, has faced a fair share of problems in China. Earlier this year Google defied China’s censorship law, annoying Chinese authorities. Following this controversy, the company started redirecting Chinese users to its Hong Kong site.
However, last week, Google finally bowed in front of the Chinese authorities, as its license in the country came up for renewal. The company had said that it will stop redirecting Chinese users to its Hong Kong site, if its license is renewed. Google is still awaiting the renewal. In case the company’s license is not renewed, it will have to shut down its China operations completely and this will have huge implications for Baidu Inc, which is Google’s only serious competitor in China.
Last week, in a statement to Reuters, Baidu played the whole thing down, with the company’s CFO Jennifer Li telling Reuters Google’s exit would have a minimal impact and the company will only make marginal gains since the two companies have common clients. In fact, Li said that Baidu expects to grow from an increase in number of internet users in China.
Baidu’s may not be expecting too much from Google’s exit, but the impact cannot be overlooked for the company. If Google exits, Baidu will become the biggest search service provider in China with no major competitors. In a market of 400 million people that certainly could have a material impact.
Baidu’s ADRs on Nasdaq were down 0.22% to $67.40 in today’s trading. The ADRs have a 52-week range of $26.80-$82.29. The ADRs could see some huge interest in the next few days as Google awaits decision from the Chinese authorities.
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BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.
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