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Baidu: Core Search Remains Weak, Outlook Disappoints
By Shuli Ren
Baidu (BIDU) fell 1.4% in after-hours after reporting unimpressive third-quarter results and fourth-quarter outlook.
Excluding results from Qunar, revenue at Baidu rose 6.7% from a year ago to 18.25 billion yuan, roughly at the mid-range of the company’s guidance of 18.04-18.58 billion yuan.
Baidu’s core search business has been in trouble ever since a university student died after going for poor medical treatments advertised by Baidu.
Beijing has asked Baidu to revamp its search business with more functionalities on consumer protection. In the last quarter, the number of active online marketing customers at Baidu tumbled 11.8% to 524,000.
Baidu’s operating profit beat street estimates. Profit rose 11% from a year ago to 2.8 billion yuan, 18.5% above consensus. But this is only because Baidu spent less on advertising. Sales and marketing expenses fell 37% from a year ago.
Where is the growth? Baidu now sees its fourth-quarter revenue to be 17.84 to 18.38 billion yuan, or 2% decline to 0.9% growth from a year ago. The street had expected 19.6 billion yuan in revenue.
Source: Barron's Asia