Monday, October 26, 2009

Analyst comments AFTER earnings

The weak fourth-quarter guidance came as a surprise,
but in the longer term, the better efficiencies from
Phoenix Nest, which works similar to Google's AdWords,
should benefit the company, said JP Morgan analyst
Dick Wei.

"It is just short term pain, the long term fundamentals
of the company are still strong," he said.

Pacific Crest's Weinstein echoed the same sentiment,
pointing out the Q3 results have been very strong.
He believes the company's fundamentals are solid.

Search-based ads are cheaper than other forms of
advertising, which makes them popular with small
businesses in China that are just catching on to the
Internet, says Rob Lutts, chief investment officer and
president of Cabot Money Management, a $450 million
fund and Baidu shareholder.

"The key drivers for this company are just starting to
lock into gear," he said. "These are small to medium-sized
businesses of anywhere between 50 and 500 employees,
and they are just starting to use the Internet."

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