CIBC notes that recent news flow indicates that Baidu.com (NASDAQ:BIDU) is taking steps to grab share from online branded ad; notably, Baidu inking a deal with EMI to launch online ad- supported music streaming services. Baidu also reportedly obtained an Internet news service license and is prepared to launch a news portal.
Firm believes the EMI deal would enable BIDU to monetize its large MP3 traffic, while mitigating legal risks related to music piracy. Firm expects to see more cooperation with entertainment content providers as online ad supported free music may work better than paid downloads in China.
They believe a news portal would allow BIDU to directly monetize its news search through branded ads on its portal. That said, they expect only minimal revenue upside in the near term as both initiatives are still in early stages. In the long run, the firm believes Baidu is on the right track to address the issue of decelerating top-line growth, considering China's online branded ad market is ~3x of paid search market.
Notablecalls: Would not be surprised to see some buy interest in BIDU following the call. I like the chart and the fact they are trying to monetize their large MP3 traffic.
Firm believes the EMI deal would enable BIDU to monetize its large MP3 traffic, while mitigating legal risks related to music piracy. Firm expects to see more cooperation with entertainment content providers as online ad supported free music may work better than paid downloads in China.
They believe a news portal would allow BIDU to directly monetize its news search through branded ads on its portal. That said, they expect only minimal revenue upside in the near term as both initiatives are still in early stages. In the long run, the firm believes Baidu is on the right track to address the issue of decelerating top-line growth, considering China's online branded ad market is ~3x of paid search market.
Notablecalls: Would not be surprised to see some buy interest in BIDU following the call. I like the chart and the fact they are trying to monetize their large MP3 traffic.
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