Google Exit Appears to Benefit Top China Rival, Baidu

Since Google moved its Chinese search engine to Hong Kong, Baidu has made rapid gains in the mainland market, Reuters reports:

Baidu posted first-quarter net profit of 481 million renminbi, or $70.4 million, up from 181 million renminbi a year ago. Analysts expected profit of 366 million renminbi, according to Thomson Reuters data.

“It’s not going to happen overnight, but over time Google’s traffic will decline gradually, and over time we expect one-third of the advertising dollar to shift to Baidu,” said Elinor Leung, an analyst for CLSA in Hong Kong, who said that could take two or three years.

Baidu captured more than 64 percent of China’s Internet search market in the first quarter, up from 58.4 percent in the fourth quarter, while Google’s share fell to 31 percent from 35.6 percent, according to the research company Analysys International.