If ThinkEquity analyst Henry Guo is right, Baidu (Nasdaq: BIDU) is in trouble.

Encouraged by the prospects of Qihoo 360's (NYSE: QIHU) emerging threat in search, the analyst is lowering his price target and his near-term expectations for Baidu. Guo now sees revenue for the current quarter that's about to end falling below the midpoint of the company's initial outlook. He's also banking on Baidu issuing conservative numbers for the year's final quarter.

He is lowering his price target on Baidu from $180 to $150. Bulls will argue that $150 is still bullish. It's a better-than-30% hike up from here. However, it's never a good sign when an analyst is whittling down forecasts.

Guo's channel checks show that the search engine that Qihoo launched this summer is holding steady at 10% of the market. He feels that Qihoo will have to control 15% to 20% of the market to have a material impact on attracting advertisers, though for now the company is turning to Google (Nasdaq: GOOG) to help drum up a monetization plan.

Qihoo at 15% to 20% would be problematic for Baidu, which currently commands 75% to 80% of the market. Would Qihoo's growth come at Baidu's expense, or will it rub out smaller players including Sohu.com's (Nasdaq: SOHU) Sogou?

Investors obviously need to be monitoring this situation closely. If Baidu does indeed begin to lose serious chunks of market share, it won't just be Guo lowering his projections.

However, if Baidu is able to maintain its market dominance, the stock has never been cheaper. The "Google of China" is trading for just 18 times next year's earnings, even though it's growing a lot faster than that.

Keep an eye on the situation, and possibly consider buying both Baidu and Qihoo to cover both bases.

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