Baidu (ticker symbol BIDU) is the most popular search engine in China, essentially functioning as the “Google of China”. They have released their first quarter financial results, reporting earnings more than doubled over the prior year quarter to $163.5 million on an 88% increase in revenue to $372 million, both figures slightly ahead of analyst expectations. Results are attributed to strong traffic growth and improved marketing sales, and a better than expected revenue outlook has been forecast, although projected growth rates are expected to slow due to tougher prior year comparisons going forward.

Baidu derives nearly all of its revenue from search advertising and has been overtaking Google Inc.’s share of the Chinese search market since Google moved its China search engine to its Hong Kong website last year over concerns about censorship and hacking in mainland China. Baidu’s results have surged in the last year as a new keyword advertising system has fueled revenue growth. According to the Wall Street Journal (wsj.com), Baidu’s share of revenue in China’s online search market continued to grow in the first quarter, rising to 75.8% from 75.5% in the last three months of 2010, as Google’s share fell to 19.2% from 19.6%, according to Beijing research firm Analysys International. Google’s share peaked at 35.6% in the last three months of 2009, when Baidu had a share of 58.4%, according to Analysys.

Despite the apparently strong results, the stock price, which has more than tripled since Google’s move to Hong Kong in January, 2010, closed Wednesday relatively flat with the prior day’s close and was trading down slightly in the after hours market.