Menu
Baidu's growing research, marketing costs keep Q4 profit flat

Baidu's growing research, marketing costs keep Q4 profit flat

The investments are bringing more revenue from Baidu's mobile advertising business

China's leading search engine, Baidu, reported flat profit growth for the fourth quarter as the company continued its spending spree on research and product promotion.

For the period ended on Dec. 31, Baidu's net profit was 2.8 billion yuan (US$454 million), representing a 0.4 percent year-over-year decrease. Revenues, however, met the high end of the company's projections for the quarter, reaching 9.5 billion yuan, rising by 50 percent year over year.

Baidu historically reports strong earnings, but starting last year profit growth for the search giant began to drop on rising costs in marketing and research. As more Chinese users rely on smartphones to go online, the company is investing in its mobile Internet products, and focusing on app distribution and map-related location-based services.

The costs have been rising at a breakneck pace. Baidu's research expenses in the period were up 80.1 percent year over year. In addition, selling and administrative costs relating to promotional spending increased by 135 percent from the same period a year ago.

"We are pleased with how quickly this investment has gained traction," said Baidu CEO Robin Li in an earnings call on Thursday. "We showed progress in growing our mobile ecosystem and monetizing the mobile channel."

In the fourth quarter, more than 20 percent of its revenue came from its mobile advertising business, he said. Two quarters ago, the figure was at 10 percent, he added.

More users are also relying on Baidu's mobile search app. In the fourth quarter, it had 400 million active users, up from 330 million in the previous quarter.

Outside of mobile, Baidu is focusing on consumer products in the gaming and social spaces and wants to build up its international operations. The company is already testing search engines for Brazil, Egypt and Thailand.

The company expects profit growth to remain flat over the next financial quarters. For the first quarter, Baidu projects company revenue will reach between 9.2 billion yuan and 9.5 billion yuan, marking a 55 percent to 60 percent year-over-year increase.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetbusiness issuessearch enginesfinancial resultsbaidu

Featured

Slideshows

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

New Zealanders kick-started EDGE 2018 with a bout of Super Rugby before a dedicated New Zealand session, in front of more than 50 partners, vendors and distributors on Hamilton Island.‚Äč

EDGE 2018: Kiwis kick back with Super Rugby before NZ session
EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018 kicked off with a dedicated New Zealand track, highlighting the key customer priorities across the local market, in association with Dell EMC. Delivered through EDGE Research - leveraging Kiwi data through Tech Research Asia - more than 50 partners, vendors and distributors combined during an interactive session to assess the changing spending patterns of the end-user and the subsequent impact to the channel.

EDGE 2018: Kiwis assess key customer priorities through NZ research
Show Comments