Baidu.com (BIDU)

China's internet using population will continue to expand at breakneck speeds leading to more traffic on Baidu. As internet awareness spreads Baidu's P4P platform will attract SMEs (small and medium enterprises) across China. Baidu's distribution and internet awareness network will boost this trend. In Q3 2008, the company reported an 85.1% increase in revenue from the same period a year earlier, representing the continued proliferation of the Internet in China. In Q3, BIDU had over 194,000 active online marketing customers, a 35.7% increase from Q3 2007. This growth was followed by an additional 1.5% increase in customers in Q4, as well as a 58% jump in revenue from Q4 2007. Thus, as China's middle class continues to gain Internet access, Baidu will thrive because of increased traffic to its site which will bring more ad money. In 2009 alone, many analysts believe that China's Internet users will expand by 26%-27% meaning Baidu's clicks/searches will climb significantly as well.

Baidu's continuous expansion of its product offerings from Baidu's Japanese version to new features such as a social networking site, Wikipedia inspired Baidu Encyclopedia, etc. attract new users while increasing brand awareness. Furthermore, in October 2008, Baidu launched its C2C platform called Baidu Youa, which is an online merchant system where users can sell their products and services. As Baidu is the behemoth of Chinese Internet, these product diversifications allow BIDU to tap into all areas of the Internet realm and command a near-monopolistic presence. Furthermore, the high amount of innovation present throughout BIDU's barrage of new product developments indicates that Baidu will continually adapt and maintain its strong foothold in the Chinese Internet market.