Wednesday, January 13, 2010

Potential Google China Exit a Major Positive for Baidu (BIDU.O)
Buy: Potential Google China Exit a Major Positive for Baidu

Google announces "new approach to China" — Google posted on its official blog this morning its decision to stop censoring results on, with the possibility of shutting down and depending on talks with the Chinese government on operating an unfiltered search engine. The #2 in China’s search market, Google’s est. 25-30% rev market share is up for grabs, with majority likely going to Baidu. Although the Chinese version of presumably will still be available, loading times are often delayed significantly and access sporadic in China, based on our experience. Google China’s monetization and customer acquisition should also be significantly disrupted, regardless of the outcome. Thus, we view this development as a major positive opportunity for Baidu [citibank]

(on a side note I think some of the premarket trading in Baidu is an overeaction , if you must trade this story I believe your risk/reward is better suited in names like $MSFT and $YHOO.)

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