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SAN FRANCISCO/SHANGHAI (Reuters) – Baidu Inc (BIDU.O) vex ordinal lodge estimates and varnished a gleaming near-term looking as it bets on super advertiser spending and newborn Asiatic cyberspace trends, much as ethnic networking, to goad growth.

Shares of Baidu, a selection garner of hedge funds, chromatic 7.7 proportionality in after-hours trade following the upbeat earnings inform on Monday. Options traders predicted before the results that the have strength fortuity discover of its recent five-month trading range.

China, with more than 450 meg users, is the world's largest cyberspace market. Yet with cyberspace penetration hovering around 30 proportionality and individual sophistication right the bounteous cities still low, the possibleness for ontogeny is huge.

"The key attractiveness of Baidu is that they are the one and exclusive one in China, they rely on the China story, the broad ontogeny cyberspace mart and in particular search, and there's no another key competitor in the market," said patriarch Tam, a Hong Kong-based portfolio trainer with Investors Group.

Baidu, which has accumulated its pore on e-commerce and online video, grabbed more mart deal last assemblage after rival Google Inc (GOOG.O) curtailed its dealings following a high-profile fallout with Beijing over censorship. Baidu is the No. 1 cyberspace wager engine in China with a 70 proportionality mart share.

The consort breezed instance Wall Street playing targets in the ordinal lodge and reportable a higher-than-expected first-quarter income outlook.

Beijing-based Baidu's fourth-quarter net income chromatic to $175.9 million, or 50 cents a share, from $62.7 million, or $1.80 a share, a assemblage ago, before a 10-for-1 have split. That vex analysts' cipher prognosticate of EPS of 45 cents.

Shares in Baidu ended lawful trading up 2 proportionality at $108.63 on Nasdaq.

The firm, whose name comes from an ancient Song Dynasty poem, module also launch a marketing crusade in the prototypal lodge to process the awareness of wager amongst its users.

Baidu executives said the concern expects to aggressively process investments for its computer networks and offices as well as process hiring in research and development.

One of the key focuses for Baidu in 2011 module be in ethnic search, executives said at its call with investors.

"Social wager products represent a momentous assets of our total traffic and it continues to acquire at a fast speed," said Baidu's CEO Robin Li said.

"As instance passed by we realized the advertizement continuance of this product...So we are developing advertizement products or ad products for ethnic wager services and feat forward we wait to better decriminalize this category of traffic," Li said.

Last year, Baidu swollen aggressively right its set wager business. It linked up with Hulu investors to create an independent online video company, Qiyi, and also teamed up with Japanese online retailer Rakuten (4755.OS) to form an online mall.

Local media reportable over the instance period that Baidu strength equip into Sina's (SINA.O) blistering microblog creation Weibo. Baidu declined to comment on mart speculation but Li said on the call that the concern was open to opportunities that "make sense" strategically for Baidu.

SPEEDBUMPS

Despite the upbeat outlook, some analysts monish of risks.

For the ordinal quarter, Baidu had 276,000 customers, a 24 proportionality process over a assemblage past but exclusive a 1.5 proportionality process from the previous quarter.

"This lodge exclusive grew by 4,000 (customers) it's not the lowest. In Q4 2008, it grew exclusive 3,000 additional customers, but having said that, we had the playing crisis back then," said Wallace Cheung, a analyst with Credit Suisse.

"I wouldn't say (the numbers) are very bad, but it's definitely not good enough," Cheung said.

Analysts also wager an progressively combative landscape in China's wager mart in the coming years, as players same Sohu.com (SOHU.O), Alibaba Group and Tencent Holdings (0700.HK) wrestle for mart share.

Baidu said income for the prototypal lodge module come in between $360.6 meg and $371.2 million, aweigh of the cipher analyst prognosticate of $354.2 million.

Baidu cited continuing improvement in "monetization" for nearly raise fourth-quarter income from a assemblage ago.

Baidu's income per online marketing client accumulated roughly 56 proportionality in the ordinal quarter.

Total income in the ordinal lodge totaled $371.3 meg compared with $184.7 meg a assemblage ago. Analysts, on average, had due income of $360.3 million, according to Thomson Reuters I/B/E/S.

(Editing by Anshuman Daga)

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