—Google will gain share from higher growth in search traffic as it optimizes its service in China, forms partnerships, and builds its salesforce, which is largely seen as the best in the business. In addition, Google is launching search products for music, mobile, and maps this year.

—Online shopping site Taobao should gain share because Cheung points out that most Chinese don’t use search engines as their primary shopping source. In fact, 44 percent of respondents in a survey performed by Credit Suisse said they used Taobao rather than a search engine for their shopping needs. Only 22 percent said they used Baidu.  Over the next few years Cheung believes this will grow as Taobao bolsters its offerings. 

Baidu reported strong first-quarter results and said the second quarter would be strong too, but it’s tough to bet against Google in search. The only question seems to be whether it will be able to grow its share (at Baidu’s expense) as quickly as Cheung predicts.