Shares of Baidu
Deutsche Bank's research shows that Qihoo 360
It was Deutsche Bank that alerted stateside investors to the emergence of Qihoo 360 in China earlier this summer. Qihoo 360 -- a provider of a popular Web browser and online security tools -- booted Google
The surprising initial spike in popularity led Deutsche Bank to downgrade shares of Baidu, aggressively lowering its price target from $186 to $137.
The good news for Baidu is that Deutsche Bank still sees Baidu commanding 75% to 80% of China's search market. The slight gain in market share at Qihoo 360 is also compared to a subsequent channel check. Qihoo 360 is still below last month's initial boost in market share.
However, the recent gain can't be ignored. There may be more than just a novelty or curiosity factor at play here.
Baidu is big enough to acquire Qihoo 360 or fight back with anti-virus tools of its own. It recently rolled out an Android-based mobile browser called Baidu Explorer.
The one thing that Baidu can't do is ignore Qihoo 360. The market didn't flinch when Google entered the market, and the heady growth by Sohu.com's
Baidu's next quarterly report -- historically released in late October -- may be the company's most important earnings release in years.
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