China Search Industry

Chinese search leader ‘to double revenue in 2004’ – ZDNet UK News writes:, China’s largest Web search engine, says its revenues will more than double in 2004 and could double again next year as more companies pay to feature in search results.

China has the world’s second-largest Web audience after the United States. Internet operators are trying to cash in on the explosive growth of Web users and their willingness to spend on online services. “We expect our revenues to more than double in 2004 from a year earlier,” as they have done since 2000, co-founder and Chief Executive Robin Li told Reuters in an interview on Wednesday.

The bulk of Baidu’s sales comes from sponsored links, where a client pays to have its name and Web site link appear at the top of a results list when particular terms are searched. “Looking ahead, it’s hard to say — it really depends on how quickly the market matures and how many small and medium enterprises realise the promotional power a search engine can bring to them, and our best guess in 2005 is about double [from 2004],” added Li, touted to be a multi-millionaire at 36.

Market research firm Shanghai iResearch estimates the company generated about 100 million yuan (6.8m) in revenue last year, about half that of local rival 3271 Network Software, owned by Yahoo. Last month, Baidu’s Chief Financial Officer Shawn Wang told Reuters the company had been boosting revenue by about 150 percent in each of the last two years as its paid search services gained popularity.

China’s Internet users are estimated to grow to 111 million this year, from 81 million in 2003, according to the Ministry of Information Industry.

The country’s search market will be worth an estimated $50 million this year and its expected to grow to $200m by 2006, according to iResearch. A recent iResearch survey found that Baidu is nearly twice as popular among Chinese Internet users as Google, with a market share of about 49 percent. But competition has been rising after Yahoo beefed up its presence by buying 3721 for $120m late last year.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.