Topic: How was Baidu doing in 3Q07 in terms of revenue?
Data: According to consulting firm Analysys International, Baidu's revenue market share in China was 60.5% in Q3 2007, up 2.4 percentage points. Google China's market share increased 0.9 percentage points to 23.7%. Yahoo China's market share declined 1.2 percentage points to 10.4%. The table below shows the revenue market shares of Baidu and its competitors from 1Q06 to 3Q07. Analysys International also estimates total revenues of all Chinese search engines were $110 million in Q3 2007, up 28% from Q2.
Analysis: Based on the estimated total market size ($110 million) and Baidu's market share (60.5%), Baidu's total revenue in 3Q07 was $66.7 million (=$110 million x 60.5%). On average, Wall Street analysts estimate Baidu generated $65.5M in revenues in Q3. Baidu's official Q3 guidance is $64.6-66.5 million. This means Baidu's revenue in Q3 will beat Wall Street consensus and the high end of guidance.
Table: Revenue Market Share Trend of Chinese Search Engines (1Q06-3Q07)
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | |
| Market Share: | |||||||
| Baidu | 43.9% | 50.3% | 57.0% | 58.0% | 57.0% | 58.1% | 60.5% |
| 13.2% | 16.2% | 16.3% | 17.0% | 18.7% | 22.8% | 23.7% | |
| Yahoo | 21.1% | 15.7% | 13.0% | 13.0% | 13.6% | 11.6% | 10.4% |
| Sohu | 9.2% | 7.4% | 5.5% | 5.0% | 4.6% | 2.7% | 1.4% |
| Zhongsou | 4.2% | 2.7% | 3.1% | 3.4% | 2.9% | 2.4% | 2.0% |
| Sina | 3.0% | 2.7% | 1.7% | 1.1% | 0.9% | 0.6% | 0.5% |
| NetEase | 1.3% | 1.3% | 1.0% | 0.8% | 0.8% | 0.6% | 0.5% |
| Other | 4.0% | 3.7% | 2.4% | 1.7% | 1.4% | 1.1% | 1.0% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Quarterly Change: | |||||||
| Baidu | 10.8% | 6.4% | 6.7% | 1.0% | -1.0% | 1.1% | 2.4% |
| 0.2% | 3.0% | 0.1% | 0.7% | 1.7% | 4.1% | 0.9% | |
| Yahoo | -5.9% | -5.4% | -2.7% | 0.0% | 0.6% | -2.0% | -1.2% |
| Sohu | -1.7% | -1.8% | -1.9% | -0.5% | -0.4% | -1.9% | -1.3% |
| Zhongsou | -1.2% | -1.5% | 0.5% | 0.2% | -0.5% | -0.5% | -0.4% |
| Sina | -2.4% | -0.3% | -1.0% | -0.6% | -0.2% | -0.3% | -0.1% |
| NetEase | 0.3% | 0.0% | -0.4% | -0.1% | 0.0% | -0.2% | -0.1% |
| Other | -0.2% | -0.2% | -1.3% | -0.7% | -0.3% | -0.3% | -0.1% |
Note: The analysis above is based on the assumption that Analysys International was right on their estimates. We suggest that investors do some research on this consulting firm's track record, before believing their estimates.
Other reports in our Baidu 3Q07 Preview Series:
(1): Baidu Maintained 4-1 Traffic Lead Over Google China
(2): Search Queries Increased 4% vs. Q2
(3): Baidu Expanded User Market Share to ~70%
(4): Baidu Has 2x Google China's Advertisers
(5): Historical Trading Pattern Reveals Key Metrics to Watch
Related: Latest Research on Baidu; Compare 19 China Internet Stocks
