Baidu (BIDU) is a product of its market , and — luckily for Baidu — its market is massive. As the Chinese search engine of choice (the equivalent to Google (GOOG) nearly everywhere else), the company dominates the largest Internet user base in the world: 560 million in China are logged on and spend an average of 20 hours a week online, according to the China Internet Network Information Center. The U.S. has about 247 million Internet users. China is not only the world’s largest Internet market but also the one that presents the greatest possibility — many are online but many, still, are not. And Baidu has 70% market share.

Its dominance is the result of the company’s capitalizing on the Chinese government’s strict censorship regulations. Founder and CEO Robin Li has generally played nice with Chinese leadership, and as Internet use in China has increased, so, too, has Baidu’s revenues. The company posted increases of more than 50% for both revenues and profits in 2012, and has added a number of services outside of search in recent years to bolster its offering to users. In November, Baidu became the largest owner of iQiyi — a popular Chinese Hulu-like video-streaming site — and now offers services in travel (Qunar), recruitment (Baijob), and online payments (BaiduPay).

This story is from the May 20, 2013 issue of Fortune.