Chinese search engine Baidu.com Q4 results soar

Chinese Internet search engine operator Baidu.com on Tuesday reported strong fourth quarter revenue and earnings, as well as growth rates of the kind investors tend to expect from an Internet company.

Baidu's revenue rose 168 percent year on year to 114.9 million renminbi ($14.2 million as of Dec. 31, the last day of the period being reported) in the fourth quarter, as its net profit nearly quadrupled to 24.5 million renminbi from 6.37 million renminbi.

The results weren't released until after U.S. stock markets closed, but its shares soared in after-market trading, up 13 percent to $58.40.

"Continued traffic growth, customer base expansion, and the scalability inherent in our pay-for-performance business model contributed to strong financial results for the quarter," said Shawn Wang, Baidu's chief financial officer, in a statement.

Baidu will have to continue to work hard going forward now that it competes head on against Google in its home market due to Google's recent decision to open its China-based search site. Although Baidu is fighting on its own turf, where it already ranks as the leading search engine, Google has a much larger war chest to draw from in the battle for the China market.

The U.S. company reported revenue of $1.92 billion and a net profit of $372 million in the fourth quarter. It also holds a small stake in Baidu.

For the full year 2005, Baidu reported revenue rose 172 percent to 319.2 million renminbi, while its net profit nearly quadrupled to 47.6 million renminbi from 12.0 million renminbi a year earlier.

Some of the company's key costs rose considerably in 2005, particularly expenses related to its branding and the expansion of its sales force. Such costs increased to 112.0 million renminbi, up 187 percent from a year earlier, while its research and development costs rose 202 percent to 34.4 million renminbi as Baidu added new workers.