The Microsoft Yahoo nonsense which is currently proceeding brings Baidu under the spotlight.

If you can think back a bit we may be in the same over-heated area we were in 2000. Then analyst Henry Blodget of Merrill Lynch said Yahoo price potential was around $425 even though at the time they were near the $300 mark.

He was more than somewhat off the mark.

Yahoo dropped like a stone in a muddy pond by more than 95% and ended in the $10 area. Recovered since then, of course. But it was an awful warning as to how far enthusiasm can go.

Citi thinks Baidu is a good buy and has increased its one year price target from $350 to $415.

This logic is, in a sense, helped by the fact the shares have almost doubled in the last month from the low $200s.

Past experience would tell us that last year they went up too far, too fast and are due for a correction. And that will not be in the direction suggested by Citi.

Now let us try pure re...

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