Baidu Inc (百度) posted a loss for the first time since going public in 2005 as China’s biggest online search engine struggles with a changing local market and slowing economy.
The net loss was 327 million yuan (US$47.3 million) for the three months that ended in March, compared with the 187.5 million yuan loss expected by analysts.
The Beijing-based company also forecast sales below estimates and said that Xiang Hailong (向海龍), the 14-year veteran who ran the search business, has resigned.
Baidu’s American depository receipts fell more than 7 percent in extended trading.
The search giant is fighting on a number of fronts as the slowing Chinese economy dampens advertising sales and its desktop search business loses users to smartphones.
While it is sinking billions into new technologies from artificial intelligence to self-driving cars, Baidu’s more urgent need is to attract younger users to its apps to keep ad revenue growing.
Rivals such as Bytedance Ltd (字節跳動) are already winning over advertisers in products from news feeds to short video apps.
“It seems like Baidu is facing multiple headwinds in addition to macro weakness,” Citigroup Inc analyst Alicia Yap said in a report after the results.
Revenue rose 15 percent to 24.1 billion yuan, slightly below estimates for 24.3 billion yuan.
The company said that revenue this quarter would be 25.1 billion yuan to 26.6 billion yuan, as much as 14 percent below analyst projections.
Baidu’s American depositary receipt closed at US$153.7 in New York before the results. The board authorized a new US$1 billion stock buyback program.
Baidu’s loss was fueled by escalating costs in content and marketing.
The company partnered with China Central Television to promote its digital wallet during the Lunar New Year and might have spent as much as 1.9 billion yuan on the “red envelope” giveaway, Bloomberg Intelligence analyst Ling Vey-sern said.
“Baidu’s value as the starting point of info search is being challenged as contents become even more segregated and with fiercer competition,” China Renaissance analysts led by Ella Ji wrote in a research note before the results. “Lack of product differentiation leads to low-efficient users-acquisition spending, putting more pressure on its operating margin.”
PLANNED OUT: The government is lifting sale and export restrictions on 60% of the 20 million masks made daily, but people can still make purchases using their NHI cards Twenty thousand boxes of 50 masks each would be on sale at FamilyMart convenience stores starting tomorrow, Taiwan FamilyMart Co Ltd (全家便利商店) said yesterday. A box of 50 masks would cost NT$249 for those with FamilyMart memberships and NT$299 for those without, with no limits placed on how many boxes a person can buy, the company said. Convenience store chain operator Hi-Life International Co Ltd (萊爾富) said that it would also start selling masks from tomorrow. It has yet to announce details about prices and quantity. Hypermarket chain operator Carrefour Taiwan (家樂福) said that it would start selling packs of five
Delta Electronics Inc (台達電), the nation’s leading power management solutions provider, has signed an agreement to acquire Canadian software firm Trihedral Engineering Ltd to bolster its smart production efforts, it said on Saturday. Delta said in a statement that it would acquire Trihedral for C$45 million (US$32.68 million) through its 100 percent-owned subsidiary Delta Electronics (Netherlands) BV. Trihedral specializes in supervisory control and data acquisition (SCADA) and industrial Internet of Things software, which would strengthen Delta’s hardware offerings in fast-growing areas such as automation, artificial intelligence and data analytics, it said. “The collection, monitoring and analyzing of data are critical to Delta’s two
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
BOOSTING BUYING: A source said that the idea of pre-ordering vouchers online is being considered, but the preliminary plan is for people to buy them at post offices A stimulus voucher program to be rolled out next month to boost consumption would be available not only to Taiwanese, but also foreign nationals and Chinese spouses who hold residency permits, a source familiar with the matter said yesterday. The government is fine-tuning the details of the program, which involves issuing vouchers for in-store purchases to revive buying amid the COVID-19 pandemic. During a radio interview on Monday last week, National Development Council (NDC) Minister Kung Ming-hsin (龔明鑫) said that the plan is to allow anyone, regardless of age or income level, to buy NT$3,000 (US$99.89) worth of vouchers for