5 Billion Reasons to Buy Baidu.com, Inc. (ADR) (BIDU)

Moreover, it was rumored that Sohu.com Inc. (NASDAQ:SOHU)‘s Sogou and Qihoo were in talks of partnering together. The partnership would result in a combined 18% of the total search market. Now, that’s not much, but, as China is undergoing a shift to mobile, it would give both companies a window of opportunity to turn in more search queries that Baidu.

Whether or not such a partnership will materialize is a different story. I don’t think it’s likely. Sohu and Qihoo seem to be on the verge of converging business models — Web portal, search engines, and desktop browsers — which would lead to eventual conflict. Moreover, both have had blowout quarters. In Q4 2012, Sohu saw revenues grow 78% year over year, while Qihoo’s revenues rose by 215%. So the companies may already be too proud to cooperate on a high-functioning level needed to take on Baidu.

Even if Qihoo and Sohu are able to strike a deal, unseating Baidu is unlikely. As fellow writer Rick Munnariz has noted, Microsoft Corporation (NASDAQ:MSFT)‘s Bing has tried to unseat Google by “populating the Web with Bing search boxes.” Even as Bing started with more search market share than Qihoo and Sohu combined, it has yet to make a true dent in Google’s stateside dominance.

Why is that?

Ultimately, online search seems to work best as natural monopoly. That is, search functions most efficiently and creates the most value for customers when there’s just one player. And now that Google and Baidu both have properties in video, email, the cloud, and more, the data that they know about their customers is even greater. In turn, these companies can use that data to ensure their dominance in other Internet verticals — like mobile.

So, Baidu bears, say what you will about mobile or competitive worries. In the end, I expect Baidu’s current price of $92.56 — close to its 52-week low of $85.96 — to be an incredible buy opportunity. Search engines become more powerful with every search. Now that Baidu is processing 5 billion queries a day, the company will remain China’s top dog and maybe, in the future, become more powerful than Google.

The article 5 Billion Reasons to Buy Baidu originally appeared on Fool.com and is written by Kevin Chen.

Fool contributor Kevin Chen owns shares of Baidu. You can follow him on Twitter at @TMFKang or on Google+. The Motley Fool recommends Baidu, Google, and Sohu.com and owns shares of Baidu, Google, and Microsoft.

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