Dueling Fools: Baidu Bear Rebuttal

"Baidu and China are growing a lot faster than analysts had projected, and I just wouldn't want to stand in front of that kind of grinding momentum."
-- Rick Munarriz, five minutes ago

When did you become a momentum investor, Rick? Baidu.com (Nasdaq: BIDU  ) may be a great growth story, but resting the thesis on misfiring analysts is simply too dangerous.

After all, momentum is fleeting, especially in the technology industry. Show of hands, please. Who remembers Prodigy? Co-created by AT&T and Sears, it was an Internet service provider long before there was United Online (Nasdaq: UNTD  ) or Earthlink (Nasdaq: ELNK  ) .

Where is Prodigy today? It teetered toward irrelevance for years before SBC acquired it in 2001.

What's to prevent Baidu from becoming the next Prodigy? Government assistance? Rick doesn't give the firm a home-field advantage. Patents? I don't find any.

Meanwhile, Google (Nasdaq: GOOG  ) , Yahoo! (Nasdaq: YHOO  ) , and Microsoft (Nasdaq: MSFT  ) combined have more than $50 billion at their disposal. And private-equity firms have tens of billions more available. Surely a portion of all that will be dedicated to figuring out how to make search more than the digital game of pin-the-tail-on-the-website that it is right now?

Of course it will. So, I ask again: How soon after you invest in Baidu will that be?

You're not quite done yet! To see the bull rebuttal and the opening arguments, click here. If you've already read everything, cast your vote for the winner here.

Baidu is a recommendation of the Motley Fool Rule Breakers growth investing service. Ask for us a free all-access pass to get a closer look at all six stocks that have more than doubled since this market-beating portfolio began two years ago. Your pass is good for 30 days, and there's no obligation to subscribe.

Fool contributor Tim Beyers, ranked 762 out of more than 20,700 in Motley Fool CAPS, didn't own shares in any of the companies mentioned in this story at the time of publication. Get the skinny on everything Tim is invested in by checking his Fool profile. You needn't search for disclosure at The Motley Fool.


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