Wow! A week ago, I never heard of Baidu (BIDU).
Many of you have, but for those who are not familiar with this company, it is sort of the Google (GOOG) of China. Baidu provides Internet searches using Chinese characters, which removes the need to know English--pretty big if you live in China and don't know English.
I heard there are a couple of people who live in China--say 1 billion or so. So there isn't any market, is there? Nah!
I'm learning about Baidu, still, but the Google-like connection gives it some intrigue.
You know what else makes it intriguing? Today, it jumped from $620/share or so to OVER $700. In fact, earlier this morning, it reached as high as $718/share.
What caused THAT?
It seems like Google got banned from China. I don't know whether servers are capable of keeping out Google entirely, but the rumor mill says that nobody can advertise on Google within China. OK...That just about kills most of the revenue that Google can make from its model.
It's an awesome opportunity for Chinese search engines. I guess there are a few, but they're all small players. The data numbers indicate that Baidu gained basically ALL of Google's previous market share.
When you're the biggest, and you get the majority of the second biggest, guess what that makes you? You're kind of BIG TIME now!
My guess is that people are overreacting to Google's banishment, as Baidu still needs to learn how it can capitalize on it fully. Certainly, they stand to make more profits without Google getting in the way, but how much more and how quickly they'll realize those won't be answered for a while.
People around the world should pay attention to this, though.
China is NOT a free market economy. There are a lot of restrictions, still.
China kicked out Google. They might have had very good reasons, but Google is not known to be a very antagonistic company. Chances are, they only threat they posed was economic--not political.
What will keep China from benefiting from other non-Chinese companies developing an infrastructure and niche market within China only to have China boot them once the perceived economic threats outweigh the company's benefits?
Is Google a one-time exception, or does it represent the beginning of a trend?
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