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Baidu Report Profits Boost Thanks to Online Advertising Revenue

Baidu Report Profits Boost Thanks to Online Advertising Revenue

Baidu, China’s biggest online search engine, has reported a huge increase in profits for the second quarter, a result which is largely attributed to the company’s continued advertising revenue boom.

A net profit of 2.8 billion yuan ($436m, £282m) was reported for the three month period to the end of June, which marked a 70% increase. Advertising revenue for the same period enjoyed an increase of nearly 60% with 5.5 billion yuan, and can be seen as responsible for much of the success.

The number of client’s advertising through Baidu in the second quarter increased by 18% against the year before, and as the number of clients grows, revenue grows with it; especially since the company can command top prices for advertising keywords.

Baidu is Asia’s most popular and successful search engine, responsible for 80% of China’s search engine activity. This makes the site a very attractive proposition to advertisers. Analysts believe that this overwhelming majority of interest in the search industry afforded Baidu a lot of bargaining power, allowing them to optimise incoming advertising revenue from companies wanting to take advantage of this popularity.

With more than 500 million users, China is the world’s biggest internet market. In the future that figure is expected to grow.

Search engine Baidu also continues to diversify its business in an effort to maintain its high levels of growth. Earlier this year the company launched its own low cost smart phone in a bid to benefit from China’s increasing mobile market and the increasing number of people accessing websites such as Baidu from their phones and other handheld devices.

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