Baidu.com (BIDU) hasn’t found a meaningful strategy to monetize their online traffic yet and continues trying to increase its mobile market share and increase recognition of its application-based search, says Cynthia Meng, Managing Director of Jefferies & Company, Inc.
“What will make us change our mind [about Baidu] is some meaningful revenue contribution coming from mobile search. They are seeing more than 30% of the traffic shifting from PC to mobile already, while mobile search monetization hasn’t really started for Baidu. So we are waiting to see some tangible evidence that it is going to be meaningful for them or going to be effective monetization of the mobile search,” Meng said.
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Meng has a “hold” rating on the stock, and she is looking for tangible evidence of mobile monetization and a filling up of the capability gap in its mobile Internet positioning.
“They don’t have very high market share or a recognition or presence in the mobile application-based search compared to what they are being recognized in the mobile browser-based search. But most of the mobile search, as we understand, is happening within the mobile applications, so they need to fill up that capability gap. This is something that I believe investors are interested to look for,” Meng said.
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