Shares of China's largest web search company, Baidu, more than tripled in their U.S. market debut on Friday.

The Beijing company's initial public offering sparked huge interest internationally. Baidu.com was repeatedly described as a potential Chinese Google, serving the world's most populous country, where internet usage is surging.

 

But even analysts who expected a strong market debut were stunned Friday when Baidu shares more than trebled the $27 per American Depositary Share pricing of its IPO in the first U.S. listing of a Chinese search engine.

"It's just been amazing," said Sal Morreale, who tracks IPOs for Cantor Fitzgerald. "It could be over-enthusiasm, it could be the way Google charted, but there is obviously a lot of speculative buyers who think this could be an Asian Google." Shares of Baidu surged as high as $151 in intraday trading and closed Friday at $124.

Baidu is tiny by U.S. standards. The company earned $1.8 million on revenue of $13.6 million during the first half of this year. Investors are betting it will grow rapidly as more of China's population becomes hooked on the internet.

Despite its investment in the company, Google represents a major threat to Baidu because the company is gearing up for a major push into China. Yahoo and Microsoft, which rank second and third, respectively, behind Google in U.S. share of the search engine market, also have designs on China.

Although its business model mirrors Google's, Baidu faces different challenges. China's Communist government and its history of censorship pose the biggest potential stumbling blocks. In 2002, the government shut down Baidu for a week and fined the company for producing search results with content considered "socially harmful," according to Securities and Exchange Commission documents.

 

Wired