Pali Research Slaps Sell Rating On Baidu.com (BIDU)
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Pali Research slapped a dreaded Sell rating on Baidu.com (Nasdaq: BIDU), saying short-to-mid-term uncertainties are much bigger than opportunities. The firm set a $90 price target on Baidu.com, which is 21% below Friday's close of $114.
Analysts at Pali said Baidu.com's business model has become very controversial and been challenged by advertisers, internet users and lawyers. They think the controversial situation is highly likely to lead to the birth of new regulations defining rules and standards for the search market in China. The analysts said new regulations would be negative to Baidu.
Pali also said the view that Baidu is China's Google is wrong, saying they are very different fundamentally. They said the core difference is in their revenue models. Google does not mix its natural search results with sponsored links. Google’s auction based search ranking only applies to sponsored links. Baidu, on the other hand, mixes sponsored links with natural search results and the rank of search results is primarily based on bidding price, therefore its search results lack relevancy compared to Google. The other fundamental difference is that BIDU interferes with search results while GOOG does not.
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Comments
Pali Guy on to something
Pali Guy is making an interesting point. I didn't realize BIDU mixes sponsored links with natural results. That would really confuse the hell out of users. Is that what China Television was warning the public about? If that's the case then the company has serious ethical problems.
This guy doesn't understand how things in China work
Obviously, there research people don't understand how things in China work.
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how China works
China girl on Dec 15, 2008 11:39 AMThat's how china works. Its so different than US. I happen to like ads mix with regular search. But a few months ago baidu tried to supress info about poisonous milk powder and got caught. so I use google now because I cannot trust baidu.