The latest report shows that although Baidu was growing rapidly, with the slowdown of China’s economic growth, Baidu may eventually lose growth momentum.

Since the inception of Baidu, its market value has been showing fast growth. But under the influence of the continued volatility of the market, the search engine finally started to show signs of slowing in this year. While Baidu’s potential business has still very strong growth, its share price is growing too rapidly and lead to concerns of the investment banking

Since Baidu started initial public offering six years ago, its share price has soared 1,400%. Even in the context of this year’s overall market slowdown, Baidu’s share price still increased 20%. In contrast, the FTSE Index of Xinhua China 25 fell 24 percent this year.

Many economists expect that in the next few years, China’s economic growth will drop from the previous 10% to 6-8%. With the reduction of China’s economic growth, Baidu is difficult to continue the annual growth rate of over 100%.The previous rapid growth made Baidu’s stock price-earnings ratio was more than 55 times and the sales ratio was more than 26 times. With the slowdown of China’s economic growth, Baidu may eventually lose growth momentum.

Baidu’s growth model has demonstrated that we should make full use of China, the world’s largest Internet population. But there are still millions of Chinese people who have not entered into the Internet era.

At current, Baidu is China’s most dominant search engine and the market share is 80%. As long as Baidu maintains its dominant position in search engine in China and Chinese Internet users increase as expected, Baidu will continue its strong performance.

The analyst of the industry said that by 2013, the revenue of each search in every 1000 searches will grow from the current $ 4.50 to $ 6.00. Although Goldman Sachs had concerns for Baidu, Baidu’s shares pressure is expected to be eased in the near future. With the global economy backing on track, the European debt crisis is under control. These will make China’s economic growth get more confidence, thus contributing to the growth of Baidu.

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