Baidu revenue up, profit down for 4th quarter
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E-mail SHINE, February 22, 2019
Search giant Baidu said fourth quarter revenue rose 15 percent to 27.2 billion yuan (US$3.96 billion), beating previous estimates of US$3.88 billion, thanks to artificial intelligence related business initiatives and online advertising income.
But profit was down due to investment interests in video-streaming service iQiyi, which completed its initial public offering last year. Profit in the three months ended December last year dropped 50 percent to 2.08 billion yuan.
"We have been working on deploying artificial intelligence technologies beyond search functions to news feed, voice assistant, AI solutions and autonomous driving, to enable more users, customers and partners to benefit from Baidu's AI," Baidu CEO Robin Li said.
Online marketing revenue was up 10 percent from a year ago to 21.2 billion yuan, and the number of online advertisers increased 15 percent to around 529,000.
The growth rate of Baidu App's daily active user base has been accelerating over the past year, climbing 24 percent from a year ago to 161 million by the end of 2018.
Content costs nearly doubled to 7.3 billion yuan, mainly due to increased investment in its online video streaming content.
But there have been worries that Baidu's advertising income will come under increasing pressure with ad spending cuts amid economic weakness.
Total revenue in 2018 advanced 28 percent to 102.3 billion yuan.
"The diversification of Baidu's business from mobile Internet into the smart home, smart transportation, cloud and autonomous driving markets will require heavy investment," Chief Financial Officer Herman Yu said.
"These investments taken together give Baidu a balanced portfolio for short-term, medium-term and long-term returns, and we hope to see these investments bear fruit and accelerate Baidu's revenue growth in the coming years," he noted.
Baidu shares rose 3.5 percent after market close on Thursday, and it forecast first quarter revenue to be between 23.5 billion yuan and 24.7 billion yuan.
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