Baidu.com Inc., which bills itself as China's largest Web search engine, on Tuesday said it is planning an initial public offering of as much as $80 million in Class A ordinary shares.
China is a fast-growing and key market for all the major Web search players, including industry leader Google Inc., Yahoo Inc., and Microsoft Corp.'s search offering.
Baidu, in which Google has a small stake, said in a filing with U.S. securities regulators that its baidu.com Web site was the second most-trafficked Website in China and the sixth most trafficked worldwide.
Although Baidu's revenue is small, it is growing rapidly. Revenue more than doubled to 42.6 million renminbi ($5.2 million) in the three months ended March 31 from 17.2 million renminbi in the year-ago period. The company, founded in January 2000, posted a net profit of 12 million renminbi in the year ended Dec. 31, 2004.
Shanghai iResearch has estimated that China's Web search market was worth about $50 million in 2004 and is forecast to reach about $200 million by 2006.
And the industry's growth potential was tantalizing enough for Yahoo to pay $120 million in late 2003 for Chinese Web registration and search engine firm 3721 Network software Co. Ltd. Only the United States has a bigger Web audience than China.
Google, which went public last August at $85 a share, and considered by many to be a media company, now has a market value of $81.6 billion, more than Time Warner Inc.'s $74.8 billion. Time Warner is the world's largest entertainment company. Google shares now command nearly $292 each.
The Beijing-based company is selling American Depositary Shares (ADS) which represent Class A ordinary shares, according to a preliminary offering document filed with the U.S. Securities and Exchange Commission.
One ADS represents one ordinary share. The company did not specify the price at which it expects to sell the shares or how many shares it plans to sell.
The underwriters are Goldman Sachs (Asia) LLC, Credit Suisse First Boston and Piper Jaffray, according to the IPO prospectus. It is seeking a Nasdaq listing under the symbol "BIDU" Source