Google DOWN, Baidu UP

Posted by Kris | Wednesday, January 13, 2010 | | 0 comments »

Looks like GOOGLE departure from China is a gain for Baidu which is shooting up USD40!! ~10% increase.. Woot. Departing from China is like moving away from a gold mine. Imagine how big is the market once the internet penetration increase rapidly in the coming years in China.

But kudos to GOOGLE for taking an ethical stance over the possible billions of profit they can make off the China market.

New York, Jan 13th ( – Shares of Google Inc (NASDAQ:GOOG) will be opening well below the 50 day moving average, this after the company announced that it might be pulling out of China.

Google defied the Chinese government by saying it will end self-censorship of its search engine and may quit the world’s largest Internet market after attacks on e-mail accounts of human-rights activists. A series of “highly sophisticated” attacks on Google and at least 20 other companies last month, as well as limits on free speech, led to the decision, Google said in a statement on its site.

An exit from the China market will hurt Google as it will cut an estimated $600 million in annual revenue and may boost Baidu (NASDAQ:BIDU), as the Chinese search engine will solidify its lead with the estimated 388 million internet users in China.

Definitely the market is playing this dynamics by hitting Google stock pre-market and giving Baidu a big boost as the stock is up almost 60 points in pre-market. The move in Baidu stock is important as the stock chart pattern called for the stock to start rolling over with a big rounding top.

Google shares on the other hand are confirming what the technical setup was forecasting with a decisive move below the 50 day moving average, which now should serve as resistance.