Baidu, China’s largest Internet search engine, and a part of our Domain Parking Stock Index, reported a 23.5 % increase in first-quarter net profits.

However, Baidu also warned that the global downturn was affecting online advertising. The company registered a rare drop in the number of of active online advertisers, and in the revenue per online advertiser, from the fourth quarter.

The number of advertisers were down by 6.1 % from the fourth quarter 2008 to 185,000, and revenue per customer was down 4.3 %.

More than 95 per cent of the company’s revenues come from paid search listings. Last week, it officially introduced ‘Phoenix Nest’, a new keyword bidding system under which more paid listings will be more easily recognisable as such for users of Baidu’s search engine.

Baidu holds more than 60 % of China’s online search market.

In the three months to March 31 2009, Baidu reported net profit of $26.5m, on total revenues up 41.5 % from a year earlier.