Baidu was founded in Silicon Valley in the United States at the end of 1999. Li Yanhong, the founder and president of Baidu, is a senior expert in information retrieval technology and the sole holder of hyperlink analysis patent. At the beginning of its establishment, Baidu chose a slightly different business model from other professional search engines: namely, cooperating with portal websites, and Baidu divided the search traffic. This payment model was quite popular with portals at that time, and all major portals, including Sina and Netease, adopted the services provided by Baidu. But this model soon showed its limitations. The limited number of portals determines the limited demand. At the beginning of 200 1, Li yanhong borrowed Overtu r e's "paid ranking" search engine business model. Customers decide their ranking in search results by purchasing keywords and bidding, and share the benefits with these partners by placing advertisements on other top search engines at the same time through contextual content analysis technology. From 2002 to 2003, bidding ranking quickly became the main source of Baidu's income. In 2004, 80% of Baidu's revenue came from bidding ranking. At present, Baidu is the second most visited website in China and the sixth in the world. Data show that 48% of Internet users' search requests in China are made through Baidu, so Baidu is known as the largest Chinese search engine in the world. According to the data of iResearch, the market size of search engine industry in China in 2004 was 65.438+0.25 billion yuan, of which the income of search engine operators was 635 million yuan, and the income of channel agents was 620 million yuan. Baidu occupied 28% of the market share of search engine operators in China. The success of unique business model made Baidu quickly become the leader of Chinese search engine. Due to the complexity of Chinese, Baidu's search technology is very complicated. The company has developed special language processing technology to process similar search results. Up to now, Baidu has linked 690 million pages, 80 million pictures and100000 media files. It also includes news, post bars and other content. Worried about the price-earnings ratio For Baidu, the excellent performance on the first day of listing is a good start. But "a good beginning is half the battle", and the overseas capital market is not smooth. From the pioneers such as Sina and Netease, we can find that there are many precedents for their stock price performance. Take Netease as an example, 200 1 reached the lowest price of 0.5 1 USD. The cruel profit-seeking nature of capital determines that once a company fails to meet the expectations of Wall Street, it is extremely normal for its share price to plummet. The excellent performance of Baidu on the first day of listing and the rapid rise of its share price have made the P/E ratio quickly break away from the market average. This has become a hidden worry of future stock price performance. Once the company's growth fails to keep up with market expectations, it may lead to a rapid decline in the stock price level. Baidu's profit in 2004 was12 million yuan, and its revenue was1.1kloc-0/100 million yuan. The loss in 2003 was 8.9 million yuan. In the first quarter of 2005, the profit soared 140%, reaching 2.5 million yuan. According to the financial data published by Baidu in the prospectus, the price-earnings ratio of Baidu shares reached 540 times, and the price-earnings ratio of Friday's closing price reached 2450.8 times, which was quite amazing. As a comparative data, Google's price-earnings ratio on August 6 was 85.66 times. The price-earnings ratio of other brother network concept stocks listed on Nasdaq is basically between 30 and 50 times. Even if Baidu still maintains its original performance growth of more than 200%, its current share price is still overvalued. In addition, Baidu is not invincible in the search field. Google has been spying on the China market for a long time, and it is well known that it is eyeing Baidu. At present, Google holds a 2.6% stake in Baidu, and will choose to merge or develop independently when entering the China market. Subsequent development will affect Baidu's market performance. Although the complexity of Chinese search and the adaptability of local culture make it difficult for foreign capital to occupy the China market, its capital strength and brand advantage should not be underestimated. As for Baidu's important profit source, "bidding ranking" has also been questioned. This business model of determining search ranking by bidding is not conducive to the fairness and objectivity of search engines. The emergence of information interference will reduce the dependence of netizens on search. However, Baidu's current services such as MP3, picture and movie search are also facing legal disputes over copyright. Although it is not enough to affect the overall situation of Baidu, it still hinders the promotion of other business models of Baidu. At present, there are only the following head office addresses: No.2 Zhongguancun West, Haidian District, Beijing: Baidu National: 0 10-62 107788, Baidu Shanghai: 800-820-5 135, Baidu Guangzhou: 020-85658666 and Baidu Shenzhen: 000.