Earnings: Q4 Profits Up 31 Percent, But Growth Concerns Ahead For Baidu


imageChinese search engine *Baidu* turned in solid Q4 results: net income rose to $42.3 million (288.7 million yuan), up 31 percent year-over-year, and revenues rose to $132.2 million (902.1 million yuan), up 58 percent. It also turned in a $153.6 million (1 billion yuan) profit for the year — up almost 67 percent from 2007. Revenue for the year came in at $468.8 million (3.2 billion yuan), up 83.3 percent from 2007.

Growth concerns: But there are some concerns moving forward, as growth in advertiser spending is starting to slow: average revenue per customer came in at $674 (4,600 yuan) — up 24.3 percent year-over-year, but down 2 percent sequentially. That’s a sharp contrast from Q3, when advertisers spent 34 percent more than they did in 2007, and almost 7 percent more than in Q2.

Baidu (NSDQ: BIDU) attributed the drop in spending to the removal of unlicensed doctors and pharmacists from its roster during the quarter (there was a major scandal around the doctors’ claims, per TechTraderDaily), but said a “large portion” of those customers had resumed using its services. But it doesn’t shed any light on why Baidu’s growth in advertisers overall is slowing: the engine had 197,000 active advertisers in Q4, up 27.1 percent from Q407, but up just 1.5 percent sequentially. In Q3, active advertisers had grown 36 percent year-over-year, and 7 percent sequentially.

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