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Baidu Is Bad to the Dot-Com Bone

By Rick Munarriz - Updated Apr 5, 2017 at 8:00PM

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China's leading search engine sheds its dot-com baggage.

Bears won't have Baidu.com (NASDAQ:BIDU) to kick around anymore. Shareholders this morning approved the company's new name of Baidu, Inc., so shorts will need to reprint those practice targets.

What's in a name? More importantly, what isn't in a name? Stripping the dot-com from its official name isn't necessarily a shift in strategy. It's not like Apple Computer's move to rechristen itself as Apple (NASDAQ:AAPL) as it pushes into iPhone and iPod sales, since Baidu has no intention of easing up on its Internet-tethered stronghold as China's leading search engine.

This isn't even a timely change. Plenty of companies with "dot-com" stapled to their names went for the snip after the Internet bubble burst seven years ago. There's little reason to change in or out of dot-com clothing at this point.

The move isn't even a trend in China. Online-gaming pioneer NetEase.com (NASDAQ:NTES), Web portal Sohu.com (NASDAQ:SOHU), and leading travel site Ctrip.com (NASDAQ:CTRP) still proudly flash their "dot-com" appendages.

For Baidu, though, it may simply be about a change of scenery. The stock has been under fire since being called out for its sponsorship practices last month. The company has cleaned up its act, even if the scrubdown is part of the reason Baidu recently talked down its current quarter's revenue guidance.

You also have the example its stateside peers have set. Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) don't go by their namesake website URLs. Of course, they don't need to. Everyone knows where to find Yahoo! and Google. However, the same can be said for Baidu, which enjoys market dominance in China similar to Google's domestic dominance.

Even though Yahoo! and Google were ultimately accused of following the same questionable advertising practices that Baidu is distancing itself from these days, it's probably about time that Baidu followed the example of its larger Western peers.

What's a dot-com between friends, anyway?

Other recent Baidu headlines:

Ctrip.com International is a Motley Fool Hidden Gems pick. Netease.com, Google, and Baidu.com are Motley Fool Rule Breakers picks. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has been to mainland China just once, but he's longing to brush up on Mandarin and make another trip. He owns no shares in any of the companies mentioned in this story and is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

Baidu, Inc. Stock Quote
Baidu, Inc.
BIDU
$140.36 (0.70%) $0.98
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$121.68 (2.39%) $2.84
Apple Inc. Stock Quote
Apple Inc.
AAPL
$172.10 (2.14%) $3.61
NetEase, Inc. Stock Quote
NetEase, Inc.
NTES
$91.88 (0.39%) $0.36
Sohu.com Inc. Stock Quote
Sohu.com Inc.
SOHU
$17.75 (0.06%) $0.01
Trip.com Group Limited Stock Quote
Trip.com Group Limited
TCOM
$26.28 (1.31%) $0.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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