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Baidu

Baidu shares sink 10% after disappointing quarterly results

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By John Glenday, Reporter

February 12, 2015 | 2 min read

Shares in Chinese search giant Baidu have taken a hit in New York after the formerly fast growing service revealed disappointing revenue figures in the fourth quarter.

The news went sown like a lead balloon on Wall Street with Baidu’s stock sinking 10 per cent lower as traders digested news that revenue for the period reached just 14.05bn yuan, as opposed to the 14.12bn yuan which had been predicted.

Sentiment was further sullied by Baidu’s admission that this soft patch had extended into the current quarter with revenue also expected to fall well below what analysts had pencilled in, with an expectation that revnues will come in at 13.07bn yuan as opposed to 13.62bn yuan.

Baidu has laid the blame on the shortfall on a greater number of its users switching from PC’s to mobile devices, whose smaller screens limit advertising – although mobile revenue also exceeded desktop revenue for the first time in the company’s history.

In a statement Baidu chief Robin Li said: “For the upcoming quarter, our guidance reflects the combined impact of both the late timing of Chinese New Year this year and mobile's growing traffic contribution, which monetises at a rate lower than that of PC," he said.

"We expect mobile's monetisation rate to trend up throughout the year.”

Unlike its compatriot in the west Baidu is also facing stiff local competition from the likes of Qihoo 360 and Sogou, which are growing rapidly in the online search sector.

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