So Baidu Got Beat Up — Now What?

First, Raymond James and Jefferies. Now, Credit Suisse. Analysts across the board are are beating up on Baidu (NASDAQ:BIDU) and shares are now plugging along at a year-to-date loss of over 4 percent. The company effectively took over Google’s (NASDAQ:GOOG) share of the search engine market in China when the company made its exit, but everyone’s favorite underdog, Qih00 360 (NYSE:QIHU), has been eating away at Baidu’s search market share since it was released a few months ago.

According to Forbes, Wallace Cheung of Credit Suisse puts mobile search at 30 percent of Baidu’s search traffic and is expected to grow to 50 percent by Q3 2013. These are good numbers for a country that is leading the way in mobile Internet use, but Cheung adds that Baidu only generates between 2 and 3 percent of its total revenue from mobile search. Echoing the problems many American companies are having — i.e. Facebook (NASDAQ:FB) — the company is clearly having difficulty figuring out mobile.

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The Qihoo web portal, which defaults to its search engine and provides the company with the majority of its advertising dollars, racks up 368 million clicks per day, according to a press release. It posted a year over year revenue increase of 107.3 percent in the quarter two. Numbers are difficult to come by as Qihoo has been in the search engine game for such a short period of time, but it has been estimated to control about 10 percent of the market.

Despite the beating and competition, Baidu bouced back from $106 this past trading week to close Friday at $111.22. The Trefis Team currently has a $123 price target on the stock — currently trading around $107 — pointing toward a coming explosion in ad spending in China. By 2016, eMarketer expects mobile ad spending in China to hit $780 million. With Baidu sinking 25 percent of its R&D budget into mobile, perhaps the company will keep an edge of the competition.

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