Baidu Has Its Head in the Clouds

Don't hang up on Baidu (NAS: BIDU) just yet.

This promises to be an interesting week for China's leading search engine in terms of its mobile initiatives.

"We have a few partnerships coming up and will announce it in a week," Wang Jing -- Baidu's vice president of engineering and head of mobile -- told Reuters on Friday.

The dot-com darling teamed up with Dell (NAS: DELL) last year to make handsets based on its Baidu Yi mobile operating system. The fact that Jing mentioned partnerships -- plural -- should be juicy.

Baidu following Google (NAS: GOOG) into mobile isn't much of a surprise. Google is the top dog in display advertising for mobile, and a good reason for that is the company's success with its open source Android platform.

We knew that an updated Baidu Yi would be called Baidu Cloud last week, but now we're starting to see why. Sources are telling The Wall Street Journal that the new, entry-level smartphones will play nice with Baidu's services, complete with 100 gigs of cloud storage.

China is obviously a big market. There are already 356 million mobile customers in the world's most populous nation. However, seeing them flock to Android smartphones or higher-end Apple (NAS: AAPL) iPhones is enough to convince Baidu that it needs a bigger presence here.

As a hometown hero, Baidu is going to have no problem drawing consumers to Baidu Cloud if the partners are solid and the service is priced right. The company commands 78% of the search market, so people are more than familiar with the company, its website, and its portal services.

If Baidu is able to land more than a single major handset manufacturer and more than one of China's leading wireless carriers it would be easy to see the market warm up to Baidu after turning away on the heels of a disappointing first-quarter report.

Baidu is getting a callback! Let's see how it answers.

Bullish on Baidu
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At the time thisarticle was published Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Motley Fool owns shares of Baidu and Google. The Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Dell, Baidu, Apple, and Google.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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