Baidu in 2014: Can It Keep Rolling?

Baidu (NASDAQ: BIDU  ) had a redemptive 2013. Now it's time to see if it can muster a repeat performance in 2014.

China's leading search engine raced back into investor fancy last year. Game-changing acquisitions and accelerating growth projections work wonders on discarded former market darlings. The stock soared 77% last year, and that's pretty remarkable since it was trading lower for 2013 at its midpoint. However, now that Baidu is armed with new toys that will increase its presence in mobile and online video, it will be interesting to see if it can live up to heightened expectations.

Analysts see revenue and earnings growing 37% and 31%, respectively, this year. Global leader Google (NASDAQ: GOOGL  ) is only projected to grow its top line by 16% this year, but that's what makes Baidu so magnetic. Google toils away in developed global markets that are growing slowly while Baidu is focusing on the world's most populous nation: China. China offers the one-two punch of a fast-growing economy and a country that's still somewhat early in the online migration cycle. 

Google used to be Baidu's biggest threat, but these days the company that Baidu sees in the distance when it peeks at its rearview mirror is Qihoo 360 (NYSE: QIHU  ) . Qihoo 360 also had a great 2013 -- up 176% -- and it's growing faster than Baidu as it begins monetizing the search platform that it rolled out two summers ago.

Investors used to think that Qihoo 360's early success in search would slow Baidu, but a little healthy competition has actually helped. Advertisers still can't abandon Baidu as a marketing platform since it draws the lion's share of search queries. However, the story that will play itself out for Baidu in 2014 isn't just a matter of the four quarterly reports that we'll be getting. The market wants to see how Baidu can piece together the acquisitions that make it a major player outside of search.

Investors got a taste of that when Qunar (NASDAQ: QUNR  ) -- a fast-growing online travel portal -- went public late last year. Baidu has a controlling interest in Qunar, and it remains to be seen if Baidu takes some of its other appendages public this year. Along the way, the critics who argued that Baidu lacked a presence in mobile were silenced last summer when it snapped up the leading app marketplace provider. If that wasn't enough, Qunar's press release last week -- boasting about booking 60,000 air tickets via mobile in a single day -- find few investors questioning if Baidu is too tethered to desktop search.

It should be a solid year of fiscal growth for Baidu, but once again it will likely be its ability to stand out as a dot-com darling with visions beyond 2014 that ultimately drives the stock higher. Since going public in the summer of 2005, Baidu has only lost ground in 2008 and 2012. The odds are in its favor for another healthy year of gains and growth.

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