Baidu (NASDAQ:BIDU) reported fourth-quarter results last week. While the company's earnings were actually down from the year-ago quarter, revenue soared 50%. What should investors make of these mixed results?
A closer look at Baidu's situation reveals that China's dominant search and online advertising company is positioned strategically to make some big investments that could pay off handsomely. For that reason, a temporary hit to earnings at the expense of bigger spending makes perfect sense. Investors, in fact, should encourage such behavior in light of Baidu's opportunities.
One word encapsulates Baidu's massive opportunity: mobile. Fool contributor Daniel Sparks talks about Baidu's big opportunity in the following video.
Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com, Baidu, and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.