Baidu shares leap after profits double

SHARES of Baidu jumped 3.18 percent in after-hours trading on NASDAQ after the search giant said profits more than doubled in the second quarter as customers increased after biggest rival Google lost market share in China.

Net income surged 118 percent to US$123.5 million, or US$0.35 per share, the company said today.

Total revenue in the three months jumped 74 percent from a year ago to US$283.3 million.

The number of active online advertising customers rose 25 percent year on year to 254,000. It added 33,000 clients in the second quarter after a nationwide marketing program.

"Both big cities and second or third tier cities saw strong increases in customers, which is attributable to the increase of sales force," senior vice president Shen Haoyu said in a conference call today.

Baidu also said it is developing search products for wireless Internet to adapt to new user behavior.

Earlier media reports said Baidu is developing its mobile operating system to confront Google's Android.

Chief executive officer Robin Li said he is "optimistic about the mobile Internet and there are R&D projects going on internally" but he wouldn't confirm the reports.

Top advertisers come from categories including medical companies, education, travel and franchises, Baidu CFO Jennifer Li said.

Baidu hopes to generate total revenue of US$324.4 million to US$333.3 million in the third quarter, or a 72 to 77 percent jump year on year.

Google recorded a 27.3 percent market share in the second quarter, down from 29.5 percent in the previous quarter, according to a latest report by research firm iResearch.

Baidu accounted for 70.8 percent, the first time it exceeded 70 percent. In the fourth quarter of 2009, Google's market share was 32.8 percent versus Baidu's 64.8 percent.

Google started to redirect mainland users to its uncensored Hong Kong search site in late March but kept music, online maps and other services in China's mainland. Although it has renewed its Internet Content Provider license earlier this month, some online advertising agencies have already shifted to other domestic search engines, including Baidu, Tencent's Soso and Sohu's Sogou.

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