Weekly Chinese Internet Note: Baidu In Focus
In our Chinese Internet note this week, we focus on Baidu (NASDAQ:BIDU). Baidu released a new test version of its PC maintenance software last week. Also, its CEO explained why Baidu was more than just a copycat of Google (NASDAQ:GOOG). And finally, we also discuss the impact of the company being included in the MSCI China Index.
We currently have a $211 price estimate for Baidu, which is almost in line with its current market price. Our 2015 revenue estimate for the company is $10.6 billion, as opposed to the consensus estimate of $11 billion. [1]
See our complete analysis of Baidu here
New PC Maintenance Software
Baidu released the first beta version of Baidu Cleaner, which is expected to be the successor to Baidu PC Faster, the company’s free PC maintenance software. The published beta version focuses on removing junk and temporary files and data from the system. After scanning the system for files that can be deleted, the software gives a listing of such files under several heads. These categories are junk, privacy, plugin and memory. Deleting files from the junk and memory categories frees up hard disk space. The extent of space saved can be viewed before deleting the files. [2]
CEO On Why Baidu Is Not A Copycat
The CEO of Baidu elaborated on why the firm has always been more than a copycat of Google. While Google focused on indexing content, Baidu went one step further and encouraged the creation of content. Later, when the mobile ecosystem became important, Google focused on creating and popularizing the Android platform. Baidu, on the other hand, has a focus on connecting users not just to information, but to services as well. To provide reliability to users in this regard, Baidu has even compensated users who were scammed by the sites they found through Baidu. [3]
Baidu To Join MSCI China Index
MSCI will modify its emerging markets and China indexes to include Chinese companies listed in the U.S. This will lead to the inclusion of Alibaba (NYSE: BABA) and Baidu. The inclusion in these indexes could lead to large investor fund inflows to these companies, as the indexes are tracked by the managers of large funds. To give some perspective, the MSCI Emerging Markets Index was the benchmark for $1.52 trillion worth of actively managed funds as of June 2014. [4]
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