Baidu Executives' Comments on "Baidu Online Marketing Professional Edition" During Q2:09 Earnings Call
"Strong Buy" Rated U.S.-Listed Chinese Stocks (February 8, 2012)
By Mark Wu
Here are comments made by executives of Baidu Inc. (NASDAQ:BIDU) on the company's new service, Baidu Online Marketing Professional Edition:
"... In April, we officially launched Baidu Online Marketing Professional Edition and enhanced the bidding platform for online marketing customers, also known as Phoenix Nest. While still very much in its early stages, customer acceptance was very encouraging. Online marketers are appreciating the greater options in keyword tools and searching capabilities, as well as Phoenix Nest enhanced tools for measuring online. During this quarter, the rollout of Phoenix Nest went very well and we are pleased with the progress to date. As we continue to educate our customers and improve upon this product, we expect the benefits of Phoenix Nest to ramp up in the quarters to come in terms of enhanced monetization as well as improved ad relevancy.
"... With the ongoing rollout of Phoenix Nest, we expect to increase sales headcount to support the effective implementation of this new platform."
"... We are happy with the progress of Phoenix Nest so far, but we're not ready to say that Phoenix Nest will have a very positive revenue impact at this time because we are pushing out some of the paid results from the Classic Edition which would reduce the revenue generation. Once this final process is completed, we will start to see net positive impact from the Phoenix Nest."
"... We see very good adoption rate right now. I think the way to characterize it is probably we've gained strong footing already for this product. The customers who are using Phoenix Nest, although their spending on Phoenix Nest is still a small part, a minority of their total spending with us, but they're happy with what they saw in terms of ROI."
"... Right now we are still replacing some of the pay links that we had before in our old system with the new Phoenix Nest links. So to be able to see a positive or material positive impact on our revenue, it will probably take a few more quarters."
"... We're going to step up our sales force hiring to support Phoenix Nest implementation so it will be more people cost related in the cost structure."
"... The adoption is very high if you look at number of customers. And I think on a given day, out of 100 customers who have received paid clicks from us, about half of them received some Phoenix Nest clicks. But, as I said, the spending on Phoenix Nest is still a relatively small percentage of total spending. And one reason is a lot of customers have not put all of their keywords on Phoenix Nest yet. So that's one of the areas we're focusing on going forward into the next quarter."
"... We have positive feedback across the board, although for some customers who spend more on Phoenix Nest, the feedback is more comprehensive because they feel it, they feel the impact of Phoenix Nest. They feel the clicks are bringing them good conversion. For those who are not spending much yet, it is still unclear just because of the amount they're spending with us is small. But again, the overall, the general feedback is very positive."
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