China’s Largest Internet Companies Remain Tiny: Baidu

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Baidu (BIDU) released its fourth quarter earnings. Revenue rose 136% to $34.8 million. Net income rose to $15.7 million.

According to China Internet Network Information Center, Baidu has 62% of China’s search market. Google (GOOG) has 25% and that share dropped last year

What remains astonishing is that the revenue of the most popular search engine in China is still so small. China has the second largest number of internet users in the world after the US.

It is equally puzzling that Google (GOOG) and Yahoo! (YHOO) are not making a more concerted push to take share from Baidu, even if the investment to do so is extremely large. The potential size of the market and current modest revenue of the rival would seem to make this the ideal time to invest heavily in driving up market share.

Douglas A. McIntyre can be reached at douglasamcityre@247wallst.com. He does not own securities in companies that he writes about.