Shift to mobile Internet hits Baidu profit

February 27, 2014 by Joe Mcdonald

(AP)—Baidu Inc., which operates China's leading search engine, said Thursday its quarterly profit edged down 0.4 percent as it spent heavily to promote mobile services amid an industrywide scramble to keep up with users who increasingly surf the Web on smartphones.

Baidu earned 2.8 billion yuan ($459.9 million) in the three months ending Dec. 31, the Beijing-based company announced. Revenue rose 50.3 percent compared with a year earlier to 9.5 billion yuan ($1.6 billion).

Marketing and administrative costs surged 135 percent, which the company said was due to higher spending to promote . Research and development spending jumped 80 percent.

Baidu and rivals are spending heavily to attract users who are migrating rapidly to surfing the Web on smartphones, tablet computers and other wireless devices.

China has the world's biggest Internet market, with 618 million people online at the end of 2013, according to an industry group, the China Internet Network Information Center. That included some 500 million people—or more than 80 percent of the total—who go online wirelessly.

Mobile accounted for more than 20 percent of Baidu's quarterly revenue, according to chairman Robin Li.

"Our efforts to drive mobile adoption among customers gained significant traction throughout the year," said Li in a statement. "Building out our platform to capture the huge opportunities ahead remains our focus for 2014."

Baidu's market share in traditional personal computer-based search is more than 80 percent. But in mobile it faces intense competition from companies such as Qihoo 360, which launched a rival in mid-2012.

Baidu has expanded into music downloads, online video and other services. In July, it announced the acquisition of a smartphone apps distributor, 91 Wireless, for $1.9 billion.

Baidu's latest revenue growth "suggests some of the heavy investment is starting to yield some returns," said Barclays analyst Alicia Yap in a report.

For the full year, profit edged up 0.6 percent over 2012 to 10.5 billion yuan ($1.7 billion). Revenue rose 43.2 percent to 31.9 billion yuan ($5.3 billion).

Explore further: China's Baidu quarterly profit up 95 percent

Related Stories

China's Baidu quarterly profit up 95 percent

July 26, 2011

Baidu Inc., which operates China's dominant search engine, said Tuesday its quarterly profit jumped 95 percent on traffic growth and strong spending by big advertising customers.

Search engine Baidu says profit up 36 percent

February 5, 2013

Baidu Inc., which operates China's most popular search engine, said Tuesday its quarterly profit rose 36 percent as an economic rebound helped to boost advertising spending.

China's Baidu reports slower profit growth (Update)

April 26, 2013

Baidu Inc., which operates China's most popular search engine, reported slower profit growth in its latest quarter Friday as costs rose sharply and competition for its new mobile service intensified.

China Telecom profit up 20 percent on 3G users

October 28, 2013

State-owned China Telecom, the country's third-biggest mobile phone operator by subscribers, said Monday that quarterly profit grew by a fifth as it continued to benefit from spending by new users of data-hungry iPhones.

Sohu profit tumbles to $2 million, revenue up

February 10, 2014

Chinese portal Inc. said Monday its latest quarterly profit tumbled to $2 million due to higher expenses but revenue rose 29 percent, reflecting intense competition in China's Internet industry.

Recommended for you

Internet giants race to faster mobile news apps

October 4, 2015

US tech giants are turning to the news in their competition for mobile users, developing new, faster ways to deliver content, but the benefits for struggling media outlets remain unclear.

Radio frequency 'harvesting' tech unveiled in UK

September 30, 2015

An energy harvesting technology that its developers say will be able to turn ambient radio frequency waves into usable electricity to charge low power devices was unveiled in London on Wednesday.

Professors say US has fallen behind on offshore wind power

September 29, 2015

University of Delaware faculty from the College of Earth, Ocean, and Environment (CEOE), the College of Engineering and the Alfred Lerner School of Business and Economics say that the U.S. has fallen behind in offshore wind ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.