Baidu Q1 profit and income drop as it transitions to AI-first company
Baidu has reported drops in operating profit and income in the first quarter of 2017 as the internet giant continues evolution to become AI-first company.
Baidu reported a 9.3% decrease in operating profit to RMB 2 billion ($290 million) and a 10.6% drop to RMB 1.78 billion ($258 million) compared with the first quarter in 2016.
Baidu’s total revenues increased by 6.8% year-on-year to RMB 16.89 billion ($2.45 billion). Mobile represented 70% of the total revenues for Q1 2017, up from 60% in Q1 2016.
Baidu reports drops in income and profits in Q1 2017
Online marketing revenues dipped 1.3% year-on-year to RMB 14.73 billion ($2.141 billion) with Baidu reporting a 23.2% decrease in online marketing customers for Q1 2017. However, revenue per online marketing customer increased 26.8% to RMB 32,200 ($4,678).
The results come as the search giant continues to shift its strategic focus away from advertising to technology.
Robin Li, chairman and CEO of Baidu, said, "As we move into 2017, Baidu's strategic evolution from a mobile-first to an AI-first company continues to gain momentum. While our investment in AI is a long-term proposition, we are already seeing the powerful benefits of AI bear fruit across our existing platform.”
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Qi Lu, vice chairman, group president and COO of Baidu, said, the company’s “solid” quarter reflected its shift in focus to new AI-enabled business initiatives such as AI cloud, autonomous driving and financial services, “all of which hold tremendous long-term potential”.
"In the quarters ahead, we will intensify our efforts in applying AI to improve existing products and to accelerate the development of AI-enabled new business initiatives," said Lu.
Baidu also used its Q1 results announcement to announce its CFO Jennifer Li, will step down from her current role after 9 years, to assume the role of CEO for its investment fund Baidu Capital. Baidu Capital is a RMB 20 billion ($2.90 billion) investment fund which was established last year with a mission to fund mid and late-stage internet deals.