BAIDU, China's largest search engine operator, reported higher-than-expected profit and increasing mobile-related income in the second quarter of this year as the company banks on the popularity of smart devices to drive sales.

Profit in the three months ending on June 30 was up 29.4 percent from the previous quarter to 2.64 billion yuan (US$430.8 million), Baidu Inc said in a statement yesterday, which was higher than the 2.6-billion yuan average of eight analysts' estimates compiled by Bloomberg. The figure, however, was down 4.5 percent from the same period of last year.

Sales rose 39 percent from a year ago to 7.56 billion yuan.

Mobile revenue exceeded 10 percent of the company's total income for the first time, most of which came from advertising income on its search application for smartphones and tablets.

"Adoption of our mobile platform gained tremendous momentum, driven in part by the launch of our integrated PC and mobile bidding platform," Chief Executive Officer Robin Li said.

Baidu didn't provide mobile advertising income figures in its previous financial reports.

The company estimated revenue in the third quarter to be between 8.73 billion yuan and 8.96 billion yuan.

Last week, the company said it is acquiring third party application store operator 91 Wireless for US$1.9 billion, a move industry watchers say could consolidate its position in the mobile sector.

Mobile is a key strategy for Baidu and other Internet giants in China as the number of web users through mobile devices jumped 11 percent from the end of 2012 to 464 million by June-end, making up more than 78 percent of total net users, according to the China Internet Network Information Center.

China's online search market size increased 34 percent from a year ago to 9.38 billion yuan in the second quarter, according to Internet research firm Analysys International.

Baidu had a 78.6 percent share of the domestic search market, with Google China at 14.2 percent and Sogou 3.6 percent.