It’s interesting to compare and contrast the world’s three leading internet search engines, namely Google, Baidu and Yandex and to look at how they work in 2011.
Chinese search engine Baidu posted strong earnings in the third quarter of 2011 coming in at $654.7 million, an 85.1% increase from the same period in 2010. Baidu’s net income was up 80% to $295 million. As of September 30, 2011, Baidu had cash, cash equivalents and short-term investments of $1.8 billion. Baidu beat Wall Street expectations; analysts expected a profit of $0.83.
Baidu had approximately 304,000 active online marketing customers in the third quarter of 2011, representing an 11.8% increase from 2010 and a 2% increase from the previous quarter. Revenue per online marketing customer for the third quarter was approximately $2,148, a 65.1% increase from 2010 and a 19.1% increase from the previous quarter.
During the quarter, Baidu closed its $306 investment in Chinese travel site Qunar. Baidu now has 77 percent of the search market share in China.
We have now seen the same quarter’s figures from other major international search engines we can conclude that Baidu’s growth rate in China tops the lot, followed by Yandex in Russia. Last time for the quarter of Google and demonstrated that internationally — excluding the UK — Google’s growth rate over last year was around 44%.
Even though Google’s rate of growth outside the US and UK exceeds the US by some 20%, it still seems significantly behind both the Chinese performance of Baidu at 85% growth over the same quarter in 2010 or Yandex’s 65% growth over the same period.
Of course, both Baidu and Yandex are helped by their market leading positions in growing economies. The IMF is forecasting 9.4% growth for China in 2011 and 4.2% for Russia. By comparison, the UK’s growth rate is expected to be 1.1% and the US a rattling 1.5%.
Both Yandex and Baidu have all their operations in countries where Internet penetration is relatively low giving them great scope for. This graphic above seems to suggest that Google is losing market share internationally. But keep in Mind that Yandex only become a publicly quoted company this year giving us much more insight into the statistics relating to its performance and enabling us to include its figures on this chart. Yandex also made the first major investment in a new market with their launch in Turkey which will have had very little impact on the quarter’s figures.
Baidu CEO Robin Li pointed to three factors which had helped Baidu along in this quarter namely traffic growth, improved monetization from the Pheonix platform which drives the contextual ads and greater uptake of search advertising by large corporate advertisers.
The use of more sophisticated keyword matching for Pheonix Nest through something called “Advanced [quick] match” has been particularly successful at capturing user intent and generating strong click through rates.
Personalized Search Lands On Baidu’s Homepage. Robin Li has expressed particular satisfaction at the launch of the Baidu personalized homepage, which is not personalized search as we know it. But automated changes to the content shown on the initial homepage before the user even begins to search. This is based on search history, of course, and if a user has a history of searching for movies, for instance, then they will likely see a link on the homepage to local cinema times.
Turning to mobile, ironically, Baidu is now also the default search engine on over 80% of branded handsets in China that use the Android system, which just goes to show that Android dominance hasn’t so far been leading to greater search query shares for Google.
Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal. What it does suggest is that Google is missing out on two key markets where the search engine market is growing rapidly meaning that both Yandex and Baidu are increasing their share of the global market, at least in dollar terms.
