BEIJING, Oct. 30, 2009 (Xinhua News Agency) -- The introduction of Phoenix Nest, a new online marketing service system of Baidu.com (NASDAQ:BIDU) (BIDU.NASDAQ), will disadvantage the company's position and in turn, benefit its rivals, said market analysts.
Baidu previously announced that it would completely replace its former marketing system with Phoenix Nest in the fourth quarter, which would affect 10 percent of its quarterly revenue, according to Robin Li, Baidu's CEO.
The company predicted that fourth quarter revenue would arrive between 1.19 and 1.23 billion yuan, much lower than Wall Street's 1.36 billion yuan prediction.
Further, Baidu is likely to lose some of its users due to the fierce competition of China's online search market, according to Tickerspy.com, an independent market research website.
Tickerspy also noted that the introduction of Phoenix Nest may only lead to lost revenue and thus be a "failure."
Baidu raked in 116.7 million yuan from the third quarter's searching revenue, of which, Phoenix Nest only contributed 20 percent. The rest came from the former marketing system.
Analysts widely held that the new marketing system would be faced with a great challenge.Currently, Baidu holds 63.9 percent of China's online searching business market share.
