Baidu, Inc. (
Q2 2011 Earnings Call
July 25, 2011 8:00 pm ET
Victor Tseng - Director, IR
Robin Li - CEO
Jennifer Li - CFO
Haoyu Shen - SVP of Business Operations
Dick Wei - JPMorgan
Jin Yoon - Nomura
Catherine Leung - Goldman Sachs
Eddie Leung - Bank of America-Merrill Lynch
Paul Wuh - Samsung Securities
Jiong Shao - Macquarie
Eric Wen - Mirae Asset Securities
Yu Jin - CICC
Philip Wan - Morgan Stanley
Steve Weinstein - Pacific Crest
Cynthia Meng - Jeffries
Mayuresh Masurekar - Collins Stewart
Gene Munster - Piper Jaffray
Wendy Huang - RBS Scotland
Wallace Cheung - Credit Suisse
Muzhi Li - Mizuho Securities
Andy Yeung - Oppenheimer
Gary Ngan - UBS
Hui Dong - HSBC
Previous Statements by BIDU
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» Baidu, Inc. Q2 2010 Earnings Call Transcript
Hello and thank you for standing by for Baidu's second quarter 2011 earnings conference call. (Operator Instructions) I would now like to turn the meeting over to your host for today's conference, Victor Tseng, Baidu's Investor Relations Director.
Hello, everyone, and welcome to Baidu's second quarter 2011 earnings conference call. We distributed Baidu's second quarter 2011 earnings release earlier today. You can find a copy of the press release on the company's website as well as on newswire services.
Today, you will hear from Robin Li, Baidu's Chief Executive Officer; and Jennifer Li, Baidu's Chief Financial Officer. After their prepared remarks, Robin and Jennifer will answer your questions.
Before we proceed, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC, including our Annual Report on Form 20-F. Baidu does not undertake any obligation to update any forward-looking statement except as required under applicable law.
Our earnings press release in this call includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures and is available on our IR website at ir.baidu.com.
As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on Baidu's corporate website at ir.baidu.com.
I will now turn the call over to Baidu's CEO, Robin Li.
Hello, everyone, and welcome to today's call. I'm pleased to tell you that our top and bottomline results as well as our margins were all extremely strong in the second quarter. This performance was largely driven by increases in overall traffic and ARPU. Our customers continued to spend more of their monthly budget results.
Baidu is at the center of China's increasingly sophisticated internet market, and our efforts to foster an ecosystem around that are paying off. The results can be seen in many areas like e-commerce where we have been a major beneficiary of the recent group buy spending trend.
At the heart of this ecosystem strategy is Box Computing, which constantly improves user experience by incorporating dynamic data, content and applications directly into the search results. Specifically, our Open Applications platform is progressing well. I am proud to report that there are many developers seeking advantage of this platform. We now generate about 20 million clicks per day in less than one year of the platform's launch.
Social search feature also remains a big part of Baidu's user experience. Baidu Post Bar and Baidu Knows maintained healthy growth rate. We have added a lot of new features to make Post Bar easier to use and stickier, while increasing social interaction between users. Our large and expanding social search user base provides a solid foundation for socially-flavored products moving forward.
Recently, we've added Baidu Ting, our social product for music. Baidu Ting allows users to find, listen to and manage their music. We are embedding features for users to share and personalize music files to enable social interactions. I am proud to report that Baidu Ting has gained support from virtually all major music labels, including E&I, Universal Music, Warner Brothers and Sony Music. We expect this service to connect users through a large datable of both international and Chinese brands.
Accompanying this internal initiative, we've made a number of strategic investments and partnerships. Earlier this month, we announced a new partnership with Microsoft Bing for English-language search. And last week, we began displaying Bing's top organic results on our pages for most of the English queries we get.
We have bolstered our landing page strategy with strategic partners and investments in premium virtual players. Our objective is to ensure our users the same great experience after they click through our search results to the most popular virtual website. As part of this strategy, we have a partnership with CRIC to drive the real estate vertical and have invested in Qiyi to show these results in the online video space.
I am happy to report that Qiyi now has more than 160 million monthly unique visitors. We have more recently expanded to travel search through our investment in Qunar. This will provide users with an even better experience in the sectors that have long been one of our most popular query verticals. For example, shortly we will launch enhanced hotel-related content with Qunar.
When users search for hotels, we will serve Qunar information at the top of our results page if it is relevant. After clicking through to Qunar, they will be matched with the same high-quality information on the landing page. Each vertical partnering landing page strategy shares the characteristic of having developed a premium database of content. These high-quality partnerships enable us to monetize related traffic more efficiently. We are enabling searching and accessing rich information and making the decision to transact a similar process with the landing page strategy.