CHINA'S leading Internet search engine Baidu Inc said profit in the first quarter grew 76 percent to 1.9 billion yuan (US$299 million) as it consolidates its dominant position in China's search market.

Baidu's shares lost nearly 10 percent in after-hours trading in the United States after its second quarter outlook missed estimates.

Revenue grew 75 percent annually to 4.26 billion yuan.

It estimated revenue could add 56.2 percent to 59.9 percent year on year in the three months ended June 30 to between 5.33 billion yuan and 5.46 billion yuan, or 25 to 28 percent of growth quarter on quarter.

That will be slower than the 42 percent quarterly increase in the same period last year.

Chief Financial Officer Jennifer Li said today at a conference call after the earnings release that last year a large number of daily deal sites poured advertising money into Baidu's paid search service. She added the company has solid guidance for the second quarter.

Chief Executive Officer Robin Li said: "We'll continue to invest in the mobile search sector to enhance users' experience as income from the wireless search market still contributes a very small proportion of our overall income."

He added that Baidu currently has more than a 50 percent share in the mobile search market but that it is still rising.

On the PC side, Baidu has a 78.5 percent market share in the three months ended March 30, followed by Google's 16.6 percent.

Currently its search engine is pre-installed in more than 80 percent of China's smart phones carrying Android systems.

Baidu, however, is facing challenges from smaller rivals and other Internet service providers in China's 14 billion yuan online advertising market. Alibaba Group and other news portals like Sina and Tencent are also attracting big advertisers to spend online.

Baidu currently has a 30.9 percent market share in the online advertising sector, followed by Alibaba's 17.9 percent share.

Source:shanghaidaily