The search giant reported total revenues of RMB 27.2 bn ($3.96 bn), which was a 22% increase year-on-year, while net profit was RMB 2.1 bn ($303 million), a 50% decline year-on-year.
Baidu’s online marketing revenues, which includes search, news and video apps, were up 10% year-on-year to RMB 21.2 billion ($3.08 billion). This part of the business accounts for more than three-quarters of the company's revenue.
Revenue from iQiyi surged 55% to RMB 7bn, however, the entertainment platform was a key driver behind Baidu’s soaring content costs, which almost doubled to RMB 7.3bn.
iQiyi’s strong performance helped bolster Baidu’s other revenues which hit RMB 6.0 billion ($872 million), an 104% increase compared to the previous year.
The online video platform added 36.6 million subscribers in 2018 to reach 87.4 million.
Baidu continued to focus on AI and smart technology in 2018 with investments in autonomous driving, smart transportation and smart devices, as the company continues its shift away from search to become an AI-first company.
Robin Li, CEO of Baidu, said, "2018 was a pivotal year for Baidu, as we worked on deploying AI technologies beyond search to feed, voice assistant, AI solutions and autonomous driving, to enable more users, customers and partners to benefit from Baidu's AI."
Li had previously warned employees that 2019 will not be as rosy because China’s economy is slowing down, leading many companies to restructure their businesses.