Updated from Tuesday, Feb. 9
shares surged after the Chinese Internet giant blew past analysts' estimates in its fourth-quarter results, boosted by better-than-expected performance from its new online advertising system, which it calls Phoenix Nest.
Hot on the heels of arch-rival
recent threat to
, Baidu's strong results were welcomed by investors who flocked to the company's shares in extended trading on Tuesday.
Baidu's stock leapt up $38.57, or 8.9%, to $473.58 in response to the results, which were released after market close.
The Chinese tech bellwether reported revenue of $184.7 million, up from $132.2 million in the same period last year and above Wall Street's prediction of $180 million. Excluding items, Baidu earned $1.88, up from $1.31 in the same period last year, and comfortably above analysts' estimate of $1.68.
Said to be similar to Google's AdWords, Phoenix Nest was introduced last year, prompting the company to warn that its revenue could dip as
Baidu switched over to the new system
In a statement, CEO Robin Li said that the expected revenue dip did not materialize, which
. The firm's online marketing revenues were $184.6 million, accounting for almost 100% of its sales, and an increase of 39.8% on the prior year's quarter.
The company had about 223,000 active online marketing customers during the quarter, a 13.2% hike over the same period in 2008.
Although still unknown to many western investors, Baidu is the Chinese Google, providing search services to the world's most populous nation. The Beijing-based firm, which celebrates its tenth anniversary this year, holds about 64% of the country's search market share, well ahead of Google.cn's 31%.
due to a network hack and an ongoing censorship regime. If Google leaves the country, it could provide a massive boost to Baidu.
Opinions are divided on whether Google will ultimately risk losing its foothold in the
, although Wall Street is already eyeing Baidu buying opportunities for U.S. investors.
For fiscal 2009, Baidu brought in revenue of $651.6 million, a 39.1% increase on the prior year.
-- Reported by James Rogers in New York
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