In the video below, Motley Fool analyst Eric Bleeker discusses a few myths that seem to be circulating about Baidu (NASDAQ:BIDU).
The first is that Baidu will not be able to figure out mobile. In China, the mobile market is still in its infancy. Some 76% of mobile users there are still on 2G networks. Investors should not put too high a demand on the company's monetization so early in its growth cycle.
The second is that Android will doom Baidu. Some surveys say that Android has a nearly 90% market share in China, Eric says. But Android is different in China. There is a greater diffusion of browsers, meaning Google (NASDAQ:GOOGL) and its Android platform cannot simply shut Baidu out there.
Finally, some bears claim that Baidu is an expensive growth stock, Eric says. Baidu now sells for 21 times earnings, exactly the same number as Google.