UPDATE 3-Baidu beats Wall St estimates, sees higher revenue

* Q4 EPS $1.80 vs. Street's $1.69

* Q4 rev $184.7 million vs. Street's $180 million

* Sees $176 mln to $181 mln Q1 rev, vs Street's $170.2 mln

* Shares rise 8.7 pct in after hours (Recasts lead, updates stock price)

By Alexei Oreskovic

SAN FRANCISCO, Feb 9 (Reuters) - Chinese Internet search leader Baidu Inc (BIDU.O) eased concerns about the financial impact of its transition to a new advertising system, with fourth-quarter results and a revenue forecast that exceeded expectations.

Shares of Baidu jumped nearly 9 percent in after-hours trade on Tuesday, furthering a recent rally spurred by last month's news that rival Google Inc's (GOOG.O) could exit the China market.

"It appears, at least going by the first quarter guidance, that things are going well," said RBC Capital Markets analyst Stephen Ju regarding Baidu's move to the new Phoenix Nest search advertising system.

"I don't know if it completely dispels any concerns, but it certainly adds to the comfort level," Ju said, noting that he was looking forward to a more detailed progress report on Phoenix Nest during the company's conference call with analysts scheduled for later on Tuesday.

Baidu said revenue in the first quarter will range between $176 million and $181 million. Analysts polled by Thomson Reuters I/B/E/S expected revenue of $170.2 million.

Baidu's net income increased roughly 48 percent in the fourth quarter to $62.7 million, or $1.80 per share. Analysts polled by Thomson Reuters I/B/E/S were looking for $1.69.

Baidu CEO Robin Li said in a statement that Phoenix Nest's better than anticipated performance helped the company exceed its fourth-quarter expectations.

Baidu said revenue in the quarter totaled $184.7 million, above the average analyst expectation of $180 million.

Baidu had spooked investors in October when it said that its transition to Phoenix Nest would have a temporary negative impact on revenue. The company's fourth-quarter revenue forecast at the time was about 10 percent lower than what Wall Street analysts had been expecting.

Finance Chief Jennifer Li said in a statement on Tuesday that the transition to Phoenix Nest was now "behind us," and that the company would focus on investing in sales and marketing and research and development.

Baidu's shares, which had fallen after a rare stumble the previous quarter on transition issues to its new Phoenix Nest advertising system, jumped to a record high of $470.25 following the news that Google could exit China.

Baidu, the No. 1 search engine in China, could pick up a large chunk of Google market share if the U.S. search company were to follow through on its recent threat to pull out of the Chinese market because of hacking and censorship

Shares of Baidu, which closed Tuesday's regular trading session at $435.01, rose to $472.99 in after-hours trade on Tuesday. (Additional reporting by Melanie Lee, editing Bernard Orr)