SubscribeBaidu reported to be more advertiser friendly
On Nov 16, 2006, WR Hambrecht + Co released a report covered Chinese search engine company Baidu. This report is mainly to give suggestions for stock investors. It gives a positive rating to Baidu stock with a 12 months price estimation of $130 per share.
As this report is not only useful for stock investor, but also instructive for anyone who is interested in search engine business and market in China, we provide a brief introduction of the report here.
The report firstly introduces some undeniable paid-search market trends. One notable trend is that advertisers are shifting their advertisement budget from other field to paid search result. This is because users’ on-demand information requirement has driven them from broadcasting channel to search engine. Advertisers also noticed the importance of operation between search engine and user-generated content website, especially those provide product reviews.
Then the report describes search engine business model as driving traffic and clicks. It noted Baidu’s recent algorithm change. The change is said to make the search result more relevant, by placing large companies in front of small ones. It’s also reported as a driving factor of the recent partnership between Ebay-Eachnet and Baidu.
Baidu’s advertiser friendly model is the key point of this report. It mentioned Baidu’s hand-holding support for small to medium-sized enterprises. It is a reality that quite a lot of advertisers in this range lack of knowledge in online advertising. Baidu provides much better supporting service in helping customers with keywords bidding strategy. Baidu’s website layout is also reported as a key factor in its competitive advantage. Briefly speaking, it shows sponsored links directly in search result, while rivals like Google put ads in right side.
The report also noted non-technology requirement for successful search engine business, which is strong sales force and cooperation with local distributors. Baidu is reported to have 1200 people in its sales division and cooperating with 200 distributors nationwide. This has become a barrier for Google to compete with Baidu in China market.
Almost the same day of the release of the report, Baidu demoed their advertising product for real estate market. If Baidu successfully pitched these housing advertisers, it will get another huge market in near future.
Edit: Fixed price target and added stock chart.
-
Related Posts
One Response to “Baidu reported to be more advertiser friendly”
Post a comment
[...] Increase the incentive to Chinese Google Adsense users. We recall that we have introduced why Baidu is more advertiser friendly. We do have noticed that Adsense will return irrelevant result to Chinese webpage, it’s quality is simply not as good as its English version. [...]