Baidu to Double Fees Payout to Web Partners on Ad Sales

Baidu Inc. (BIDU), the operator of China’s biggest Internet search engine, expects the fees it shares with website partners will double to 2 billion yuan ($314 million) this year as Internet advertising sales jump.

Websites that were part of the “Baidu Union” network received 1 billion yuan in 2011, Baidu said in an e-mailed statement yesterday. The company is holding a four-day conference for its partners that started yesterday.

The 600,000 external websites belonging to the “Baidu Union” network help boost users and advertising sales for the Beijing-based company, which overcame competition from Google Inc. (GOOG) to dominate China’s search-engine market. Chief Executive Officer Robin Li is also relying on outside software developers to widen the range of services it offers.

“The revenue sharing figure is in line with my expectation, and shows advertising sales growth is holding up for Baidu,” said Dundas Deng, who rates Baidu buy at Guotai Junan Securities in Shenzhen. He estimates Baidu’s online ad sales will increase more than 60 percent this year.

Baidu fell 1 percent to $116.95 at 12:18 p.m. in New York trading, and has gained 0.4 percent this year.

Baidu shares some of its online ad sales with “Baidu Union” member websites that install the company’s search-engine software, according to its website. The company also works with some partners in its Internet display advertising business, it said.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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