China and the Internet sound like delicious ingredients for a growth stock recipe, and Baidu (NASDAQ:BIDU) has certainly proven tasty. As China's most popular website, the portal commands more than half of the country's search engine market share, and has actually been gaining on that front at the expense of rivals like Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO).

Sure, Baidu seemed awfully speculative in 2005 when its IPO proved frothy. If you go public at $27, open at $66, and top the $150 mark in intraday trading on your first day as a public company, that's a hard tag to live down.

However, Baidu has turned in a stellar 2006. It started out the year priced at $62.92 and has soared 85% higher over the course of the year. It wasn't just glitz appeal. Baidu has to earn its gains, one market-thumping quarter at a time.

In the first quarter of this year, Baidu saw its top line nearly triple to $16.9 million. Earnings per share skyrocketed 1300% higher, or 1600% higher when you factor out stock-based compensation charges.

"There's definitely going to be volatility going forward, but today's price may look cheap if this torrid pace continues," Tim Beyers wrote. He was looking for companies with stellar top-line growth and singled the company out for its stunning 212% in compounded annual growth rate.

In the second quarter, Baidu continued to swing well. Earnings more than quadrupled as revenues climbed 175% higher. It came in well ahead of analyst targets, but the stock slid on the news as the shares had appreciated significantly leading up to the report.

"Baidu is doing just fine," I wrote at the time. "It hit itself a homer. Unfortunately, the ball didn't carry out of the park where antsy analysts were waiting in the parking lot with baseball gloves to take home a souvenir that never came."

In the third quarter, Baidu came to the podium with a few more believers. A few weeks before the report, was singled out as an official stock recommendation in the Motley Fool Rule Breakers newsletter. Would it vindicate the growth stock research service's faith? It did. Earnings grew tenfold as the top line catapulted 169% higher.

Along the way, news that the company was growing its market share despite hungry competition helped legitimize Baidu. The company had become the world's fourth most popular site -- behind Google, Yahoo!, and Microsoft (NASDAQ:MSFT) -- and it was here to stay.

Giving Baidu its due
But what does the future hold? Well, our Motley Fool CAPS community members have something to say about that. Just take a look at how the overall sentiment stacks up:

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You can see that the majority of CAPS players are bullish, though not upbeat enough to shake the stock out of its low one-star rating.

"So overvalued," writes a bearish rorshey. "The China bubble will burst and when it does it will be very dramatic."

"How easy it will be to grow this company," counters a more upbeat eltspx. "All they need to do is emulate Google for everything they've done. The hard part is already done -- drawing traffic from Chinese net users."

Am I bullish on Baidu? You bet. I was the one that recommended the stock to Motley Fool Rule Breakers subscribers two months ago. The stock has trounced the market since then, surging 40% higher since mid-October. Between the company's new, fast-growing Web 2.0 initiatives in China and a commitment to enter Japan in 2007, the Baidu story is only beginning.

Check out the other companies featured in "The Motley Fool's 2006 in Review and 2007 Preview" special.

Baidu is a recent selection in the Rule Breakersgrowth stock newsletter service. Microsoft is anInside Valuepick. Yahoo! is aMotley Fool Stock Advisorrecommendation.

Longtime Fool contributor Rick Munarriz has been to mainland China just once, but he's longing to brush up on Mandarin and make it another go in the future. He does not own shares in any of the companies mentioned in this story. Rick 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.