Baidu, Inc. (BIDU) may have a high share price, but the Chinese search provider still trades at less than a tenth of the value of U.S.-based Google, Inc. (GOOG). However, China’s stunning economic and internet growth has many investors looking overseas.
Baidu, Inc. [[BIDU]] has replaced Google Inc. [[GOOG]] as the world’s most popular country-specific search engine, according to data from ComScore. Unfortunately, Google still operates in the richest country on earth, where advertisers are willing to pay top dollar to reach consumers. However, a crisis in America and continuing growth in China could eventually change that story.
According to the China Internet Network Information Center, internet penetration in China reached 22.6% with 298 million internet users and 279 million broadband users. The report also predicts that wireless Internet will also display a trend of explosive growth. Meanwhile, the commercial value of China’s market has more than doubled over the past year.
Baidu is also looking to enter some key growth areas, including e-commerce. Since over 40% of e-commerce purchases start with a search engine query, there is big opportunity in the country with the largest number of internet users in the world. In fact, more than 40,000 businesses signed up for the beta testing of their e-commerce platform.
In the end, China represents a quickly growing market in terms of both internet users and economic growth. Meanwhile, the country is slowly transitioning from an exporting economy to a domestic consumption economy. As this transition materializes, advertising will become a critical concern and Baidu may become the new Google.
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