Judging from its latest results, it could be that Baidu, the operator of the mainland’s biggest Internet search engine, has indeed found Aladdin’s Magic Lamp. First-quarter results exceeded analysts’ forecasts and the company is optimistic about future prospects, even though it cautions that the worldwide economic downturn is having an impact on online advertising.

Total revenue was RMB810.7 million (U.S. $118.6 million) for the first quarter of 2009, representing a 41.1 percent increase from RMB 574.39 million for the corresponding period in 2008.

Net income rose by 23.54 percent year on year to RMB 181.11 million from RMB 146.59 million.

“Despite the typical seasonality associated with the Lunar New Year holiday and overall macro economic challenges, we were able to deliver strong results by focusing on executing initiatives that drove overall performance,” said Robin Li, chairman and CEO of the Beijing-based Internet company, which has a 62.2 percent share of the mainland market, well ahead of Google’s 27.8 percent.

CLSA analyst Elinor Leung agreed. “Baidu’s marketing efforts early this year helped a lot in increasing traffic after the Lunar New Year period,” she told reporters.

The company had more than 185,000 active online-marketing customers in the first quarter of 2009. This means it registered an unusual fall in the number of members of this category, which comprises companies bidding for paid-search listings or key words or buying advertisements. Their number fell by 6.1 percent from the fourth quarter of 2008.

Nevertheless, as compared with the corresponding period in 2008 there was a 14.9 percent increase in such customers.

Advertising revenue per online-marketing customer for the first quarter was up by 22.2 percent year on year to about RMB 4,400 (US$ 644). However, that represented a sequential fall of 4.3 percent compared with the previous quarter.

The sequential decreases were primarily due to the usual seasonality associated with the Lunar New Year, a weaker economy, and the carry-over effect of the actions Baidu took near the end of 2008 to improve the quality of its customer base by removing questionable paid-search listings of customers in various industries.

For the second quarter of 2009, Baidu currently expects to generate total revenues of between RMB1,070 million (U.S.$157 million) and RMB1,100 million (U.S.$161 million), representing a 32 percent to 36 percent sequential increase.

“We are confident in our ability to continue growing,” said Li. “”In this uncertain economic environment, we see tremendous opportunity to reinforce to our customers the inherent advantages of our pay-for-performance platform.”

Analysts covering the company share the optimism.

“We expect stabilizing domestic [macroeconomic] outlook and good return on investment to support Baidu’s growth this year,” wrote Dick Wei, the vice president of equity research at JP Morgan, in a recent note.