One of the more interesting presentations during this week's Web 2.0 Summit in California came from a rare U.S. appearance by Baidu (Nasdaq: BIDU) CEO Robin Li.

Baidu has no intention of entering our market anytime soon. It has no interest in taking on Google (Nasdaq: GOOG) and Microsoft's (Nasdaq: MSFT) Bing in alphabet-based language search. Its strength lies entirely in character-driven search, where it commands roughly two-thirds of all searches in China. It entered Japan in 2008, and is eyeing other Asian markets, but that's pretty much it for now.

Li even began by pointing out that this was his first time on stage for an interview in a stateside industry conference. He's a rock star back home, complete with a traveling fan club, but he's relatively unknown here.

So what exactly is Li doing here?

Well, it doesn't hurt that Baidu's $38 billion market cap makes it as big as eBay (Nasdaq: EBAY). Stateside investors are clearly interested in Baidu as an investment, even if they may never unearth the need to use the portal itself.

Li is here to explain why his company's stock may not be as overvalued as pundits think.

Forever climbing the great wall of valuation worry
Baidu isn't cheap, but plenty of naysayers have skewered its valuation at much lower price points, only to wind up eating crow.

Baidu's heady growth and chunky margins make it a compelling speedster today, but it's really far away from its ultimate finish line.

Less than a third of China is currently online, and Li estimates that Baidu reaches 99% of those who are. Work the simple division on China's 1.3 billion residents, and you'll find that Baidu already reaches more people in China than the entire U.S. population.

Obviously, there are compelling reasons why Google -- with a thinner share of the stateside market than Baidu's mastery of China -- commands a market cap five times greater than Baidu's. Big G is a global player; Baidu is still playing regional ball. Advertisers also spend far more on marketing through Google, reaching out to consumers who -- for now -- have far more to spend. It's a wide gap, though China's economy is huffing and puffing at a brisk pace to make up the difference.

Waiting is not the hardest part
How long will it take for China's Internet penetration rate to approach that of established markets? We may not be as far away as you think.

Some bears misperceive China as a country of bike-pedaling farmers in rural areas with no inherent need for connectivity. Reality is far more refreshing. As Li points out, there are roughly 800 million mobile phone users in China -- or double the number of folks online.

For those scoring at home, China Mobile (NYSE: CHL) commands a larger market cap than Google, and even more than domestic wireless leaders AT&T (NYSE: T) and Verizon (NYSE: VZ). Can you fathom half of this country's mobile phone owners not having Web access?

However, most of these handsets are rudimentary 2G devices that do little more than make calls and exchange text messages. It will take some time before China's citizenry can embrace full-fledged smartphones and consistent connectivity.

It will happen, though. Short of China taking a step toward more restrictive access -- something that can obviously happen, but remains highly unlikely now that all eyes are on the world's most populous nation -- China will catch up.

Baidu, naturally, will catch up, too.

It's just getting started, regardless of what today's valuation metrics may indicate.  

Do you think Baidu is a good buy at this point? Share your thoughts in the comments box below.

Google and Microsoft are Motley Fool Inside Value picks. Baidu and Google are Motley Fool Rule Breakers recommendations. eBay is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended a bull call spread position on eBay. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of China Mobile, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz has only been to China once, but he relishes admiring its dot-com revolution from afar. He does not own shares in any of the stocks in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.