Will you look at that? We caught ourselves a Charly! Now, before I go on to explain how Charly fell into my trap, let me explain how sharp he is outside of the realm of picking apart Baidu.com (NASDAQ:BIDU). It's a real privilege to have him on the Motley Fool Rule Breakers analytical team. In the newsletter's first year, the average pick has tripled the S&P 500's return and that is thanks, in no small part, to Charly's amazing knack for recommending great biotech companies like Vertex (NASDAQ:VRTX) and Protein Design Labs (NASDAQ:PDLI) before they shot higher.

However, in digging up Baidu's past financials and trying to pigeonhole the company into an automated life of consistent earnings growth and a perpetual P/E of 40, he skimps on the history of past search-engine leaders not once -- but twice.

Let's put the numbers together one last time.

Company Year Revenue Profit
(Loss)		 Eventual
Market Cap
Yahoo! 1996 $21.5 ($6.4) $46 billion (9 years later)
Google 2000 $19.1 ($4.3) $92 billion (5 years later)
Baidu TTM $21.5 $3.0 ???
Revenue and profit (loss) in millions. Data provided by Capital IQ.

In terms of operating efficiency, only Baidu was profitable at this point in its life cycle. In terms of growth, it's hard to deny the potential of China's developing market over our own established market. Look at where Yahoo! (NASDAQ:YHOO) and Google (NASDAQ:GOOG) were. Now look at where they stand. Is $2.5 billion still too much to pay for Baidu?

Charly would expect a risky growth stock like Baidu -- and, yes, Baidu is risky -- to reward him substantially. Five years from now, anything less than a $6.2 billion company would be a failure according to Charly's projections. I agree. But he's aiming way too low. Open up the history book, man. Look at the two behemoths that left their footprints behind. Follow the paces. History repeats.

Buy, dude!

Wait! You're not done. This is just a quarter of the Duel! Don't miss the Bull and Bear opening arguments and the Bear rebuttal. Even when you're done, you're still not done. You can vote and let us know who you think won this Duel.

Fool contributor Rick Munarriz believes in investing in China and even recommended another fast-growing Chinese company that has soared by 78% since it was singled out in Motley Fool Rule Breakers nine months ago. You can find out more with arisk-free trial subscription.He does not own shares in any of the companies mentioned in this Duel. The Fool has a disclosure policy.