Three Reasons Baidu Is a Buy

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Baidu (BIDU) is a streaking star in the world of Internet search and positioned to be a market leader in what is now the biggest base of Internet users in the world. Theyve combined a superior search business with the lessons of Western industry leaders to create a more immersive experience than one would expect from such a young company. Hopefully you caught my initial SeekingAlpha coverage of Baidu in August, when the stock was a downright bargain. Since then, weve seen a nice run in the stock price and more than a few investors have been handsomely rewarded. In August, there was a significant margin of safety between what I calculated as the price floor and actual market price. In other words, using my assumptions, it was a home run.

This year, I revisited Baidu to get a better gauge of its evolving competitive landscape. In the Internet industry, friends and foes change faster than the seasons. It was worth looking into the new entrants to the Chinese search market and investigating the progress of old competitors. The company's positioning, if anything, seemed to improve since last year as it released several products that set it apart from competitors. After the earnings release last week, I also mentioned my key takeaways from that conference call.

Now that you are all caught up on the happenings of Baidu, Id like to investigate whether Baidu is still a sound investment. As the stock rises in price and the margin of safety

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