Bidu posted second quarter earnings of 265 million or 38.6 million dollars. This was an 87 percent increase in quarterly profit. The stock subsequently rose 12% in after-hours and is up about 40 points since earnings. The company was able to do what Google wasn’t, beat expectations by 3.3 million. Forecasts are also inline with analyst expectations of 136 million.

I think it’s clear why Bidu is a great long-term investment. The company has a 63% market share of search in China while Google holds a 26% share. China as a whole, surpassed the United States for the most number of internet users 2 months ago with more than 221 million now online. Yet this 221 million is only 16% of the Chinese population, this average is below world average and shows the potential for increase in Chinese internet users. The USA has about 50% of its users online. Recently, Bidu’s Hao123 and Video Search have been gaining popularity and the company has branched off into Japan.

The Olympics are coming up in less than a month and Bidu has a lot to gain from the exposure Beijing will bring it. The company expects consumers to utilize its search engine for information regarding the games and has even set up a site 2008.baidu.com as an Olympic channel. The extra exposure will not only help the company gain more domestic users and revenue through advertisement, but also allow global investors to see the potential and undeniable influence of this search giant.

BTW for those who are looking for a quick play on the Olympics, ( I don’t think BIDU is really an Olympic ‘play’) here is an informative seekingalpha article on investing in the Beijing Olympics.

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