Baidu profits jump as online advertising boom continues
- 24 July 2012
- From the section Business
China's largest internet search engine Baidu, has reported a 70% jump in profits in the second quarter, amid continued growth in its advertising revenue.
The firm reported a net profit of 2.8bn yuan ($436m; £282m) in the three months to the end of June.
Its advertising revenue rose almost 60% during the period to 5.5bn yuan.
Baidu has almost an 80% share of China's online search market, making it an attractive option for advertisers.
Analysts said that being the biggest player in the sector had given Baidu more bargaining power with firms looking to advertise on its portal.
"For Baidu, because of their dominant position in search, they're able to extract more pricing power in terms of advertising keywords," said Andy Yeung, an analyst with Oppenheimer & Co.
China is the world's biggest internet market with more than 500m users and that numbers is expected to grow even further.
As more people get connected to the internet, firms are also trying to use the medium in a bid to tap into potential customers, adding to growth of online companies such as Baidu.
Baidu reported that the number of clients that advertised on its portal grew by more than 18% in the second quarter, from a year earlier.
At the same time, Baidu has also made moves to diversify its business, in a bid to sustain its high levels of growth.
Earlier this year, the firm launched a low-cost smartphone to tap into the country's fast-growing mobile market and the increasing number of consumers who are accessing the internet through such devices.
Robin Li, chairman and chief executive of Baidu, said that the firm was likely to see robust growth in the near term.
"In the coming quarters, we will maintain momentum by rolling out optimised sales processes and more advanced tools to help current and potential customers increase returns on their online marketing spend," he said.
"We will also continue to actively explore the vast opportunities in China's fast-emerging mobile internet and cloud sectors."