Dow:
Nasdaq:
S&P 500:

8280.74 (-223.32)
1796.52 (-49.20)
896.42 (-26.91)

Featured Articles
Recover from Losses
Learn how to use a simply stock options strategy to cut your breakeven in half and quickly recoup losses!

How to Recession-Proof
Learn where to invest your money to minimize damage from the impending U.S. recession.

Gauge Stock Momentum
Learn how to determine when your investments have begun to lose steam to sell out before the crowd!

Research Tools
SEC Filings Analysis
Executive Compensation

Baidu.com, Inc. (NDAQ: BIDU) shares extended their losses from yesterday despite positive earnings this week from fellow Chinese firm Alibaba.com. The top Chinese e-commerce firm more than doubled its first quarter earnings on strong demand for online trade and better profit margins after cost cutting. However, the broader Chinese indexes sold off in recent weeks thanks to fears of rate hikes and inflationary concerns in mainland China.

The Shanghai Composite Index continued its plunge as much as 2.9% today before closing down 1.2% on such fears. China's producer price index, a key indicator of inflation, rose 8.1% in April over the same month last year. These greater than expected cost increase for raw materials and industrial inputs suggest that consumer prices may continue to increase in the near-term. This is bad for Chinese consumers and could be bad for advertisers and their facilitator- Baidu.com.

Another problem on the horizon is Google's recently announced online dictionary that translates Chinese into other languages. This is the latest in a series of moves to steal market share from the Chinese tech giant and helped to spark a small decline in its shares. However, Baidu.com remains the largest search engine with a growing 61% market share compared to Google's 27%, according to Analysys International.

The overall prospects for Baidu remain bullish, however. China's internet population is rapidly expanding and has now reached 221 million, which recently surpassed the United States as the world's largest. Investors have learned from the United States that search engines (like Google) represent the most visited destinations on the web. In China, the most popular search engine is Baidu.com and it has Google beat by a substantial margin.

In the end, Google has made very little tangible progress in stealing market share from Baidu.com. Meanwhile, the economic weakness in the United States has not affected Google too much, so Baidu.com may fare better than many expect.

Shares of Baidu.com dropped $10.97, or 3.09%, to $344.20 on the day.

Add to: del.icio.us | Digg