Baidu Inc (ADR) (NASDAQ: BIDU), often considered to be the Google (GOOG) of China, is having an overwhelmingly rough start to the trading session this morning, and for good reason. News is breaking that Google may be planning on launching a Chinese search engine of its own, bringing hefty competition to Baidu. Today, we’ll talk about:
- Google’s potential Chinese launch;
- what we’re seeing from BIDU stock as a result; and
- what we’ll be watching for ahead.
BIDU Falls As Google May Launch A Chinese Search Engine
As mentioned above, Baidu is having an overwhelmingly rough start to the trading session after news broke surrounding Google. According to a report that was first published on The Intercept, Google may be returning to China as soon as next year. Of course, this is bad news for BIDU as it would mean direct and stiff competition is on the horizons.
This wouldn’t be Google’s first run in China however. Back in 2010, Google stopped offering services in the region thanks to pressure over censorship. However, the report suggests that the company has created a censorship-friendly version of its search engine that could launch in China within the next six to nine months. Should Google launch the service in China, its search engine would block Western services like Facebook, Twitter, Instagram and more that have been outlawed in China. The engine would also be capable of scrubbing results for sensitive terms. In a statement, a Google spokesperson had the following to offer:
We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com . But we don’t comment on speculation about future plans.
What We’re Seeing From Baidu
As investors, one of the first lessons that we learn is that the news moves the market. In the case of Baidu, the news proved to be negative. After all, competition from a search giant simply wouldn’t be good for the company. So, it comes as no surprise to see that the stock is making a run for the top in the market this morning. Currently (8:49), BIDU is trading at $230.11 per share after a loss of $17.07 per share or 6.91% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on BIDU. In particular, we’re interested in following the story surrounding Google’s potential launch in China and how it affects the company’s search market share moving forward. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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