Baidu Searches for Something Different
There's more to Baidu (NAS: BIDU) than paid search.
China's leading search engine is beefing up the monetization efforts on its popular message board platform.
China Daily reported over the weekend that the dot-com darling is gearing up to let its marketing customers reach out to users engaging in the millions of forums available on Baidu Tieba.
Investors need to have realistic expectations. Google (NAS: GOOG) and Baidu are the rock stars of online advertising because they are the top dogs in search. Folks hit up their websites because they want to go somewhere else, and advertisers are willing to pay a pretty penny for a sponsored slot at the top of a query's results page.
The problem with advertising on interactive forums is that people are there to socialize. Ads will be ignored. Regular users will just get used to overlooking the sponsored spots, and there's always the risk that the ads may annoy visitors to the point that they just stop coming.
It's no surprise that SINA (NAS: SINA) and Sohu.com (NAS: SOHU) -- giants in China's display advertising market -- have been struggling on the margins front these days. SINA's getting ready to monetize its hot SINA Weibo microblogging platform during the latter half of this year. Sohu has been trying to put up with the high costs of streaming chunky video files to grab a piece of that booming niche.
However, the attempt to cash in on Baidu Tieba should be incremental for Baidu -- and that's the point.
Baidu has spent the past few years padding both its market share lead in search as well as its Rolodex of advertising customers. This may not have the force of a fire hose, but it will be a gusher.
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At the time this article 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. The Fool owns shares of Google.Motley Fool newsletter serviceshave recommended buying shares of Sohu.com, Baidu, Google, and SINA. 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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