Page last updated at 08:14 GMT, Tuesday, 27 October 2009

Profits soar at China's Baidu.com

Baidu.com office
Baidu is China's leading internet firm

China's leading search engine company Baidu has reported a sharp increase in profits but warned revenue would be hit by moving to a new advertising system.

The warning sent the firm's shares more than 10% lower in after-hours trading in New York.

Net income between July and September came in at 492.9m yuan ($72.2m; £44.1m), up almost 40% on the 350m yuan recorded in the same period last year.

Baidu has more than 60% of the China's search engine market.

It plans to phase out its current advertising system and replace it with a new Phoenix Nest system later this year.

"We feel that in the first quarter there will be a material impact from the switch," the company said.

But analysts said the new system would benefit the firm in the long run.

"It is just short-term pain, the long term fundamentals of the company are still strong," said Dick Wei at JP Morgan.



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