While I am long Baidu in my 4 picks for 2009 and still ok being so (cannot change those picks anyway), the valuation for Baidu is becomming very extreme with the stock up over 300% so far this year. It now trades at 435$, at 86 times earnings!! Because of that, I feel like it is a good time to go short on Baidu going against Microsoft. The company started by Bill Gates is gaining momentum with Bing and even seems to have Google on a defensive position, something we have not seen in a long time.
For those who had not read, we had a series of article about Microsoft:
Bing is still slowly but surely gaining market share:
Last week’s announcement of a deal between Bing and Twitter generated some panic at Google headquarters and the piles of cash that Microsoft is throwing at search is starting to show results. Baidu off course is another reason why Google executives are getting frustrated as they continue to show very strong results in China.