Baidu Inc., which operates China's most popular Internet search engine, said Thursday its second-quarter profit more than doubled as its advertising customer base grew and profit margins improved.

Baidu earned 837.4 million yuan ($123.5 million), or 2.40 yuan (35 cents) per share, up from 383.3 million yuan, or 1.10 yuan per share, a year earlier. Excluding stock options expenses, Baidu earned 36 cents per share.

Revenue rose 74 per cent to 1.91 billion yuan ($282.3 million), the Beijing-based company said.

The results "reflect the healthy growth of our customer base" and improved efficiency, said Robin Li, Baidu's chairman and chief executive officer, in a statement. He said they also underscore "the vast Internet market opportunities for us."

The company had about 254,000 active online marketing customers during the quarter, up 25 per cent from a year earlier.

Baidu had about 64 per cent of China's search market in the first quarter of this year, up from 58.4 per cent the previous quarter, according to research Analysys International.

Industry analysts expect Baidu to benefit from Google Inc.'s decision to close its China search engine in a dispute over Beijing's Internet censorship, requiring users to go to its Hong Kong site. Analysys said Google's share of advertising slid 35.6 per cent to 31 per cent in the first quarter but it said there was no significant decline in search traffic and revenue appeared stable.

China has the world's biggest population of Internet users, with 420 million people online as of June 30, according to the government-sanctioned China Internet Network Information Center.

For the current quarter, Baidu forecast revenue in the range of 2.2 billion yuan ($324.4 million) to 2.26 billion yuan ($333.3 million), an increase of 72 per cent to 77 per cent from a year earlier.

Baidu's U.S.-traded shares rose $2.59, or 3.5 per cent, to $75.90 in after-hours trading. The stock earlier slid 73 cents to close at $73.31.