Thursday, April 29, 2010

Baidu -- Sexy Financials -- Impotent R&D

Baidu (BIDU) lays out some growth numbers and continues to make Yahoo (YHOO) look good. 60% increase on the top line and 165% increase in net income. Applause please.

Google (GOOG) in China looks confused but they were savvy enough to ignore that one.

Google has a monster algorithm. Baidu has next to nothing in R&D spending. They are only up some $18 million because they hired a few guys. The R&D spend seems to track revenues by 10%. They may be big now but someone can beat that. Baidu does not even brag about R&D or claim its a strength.

Given the level of innovation within China, Baidu is vulnerable.

Then Yahoo hits another air pocket.

Disclosure: No position in this stock