Mobile business boosts Baidu sales amid overseas expansion

Mainland internet search giant pushes expansion into overseas markets after recording 34 per cent increase in income for the second quarter

PUBLISHED : Saturday, 26 July, 2014, 1:39am
UPDATED : Saturday, 26 July, 2014, 1:39am

Internet search powerhouse Baidu, which saw a 34 per cent jump in net profit in the second quarter, is stepping up the expansion of its mobile business amid efforts to sharpen its focus on international markets.

"We had a great quarter as we continued to build a very strong mobile momentum," Robin Li Yanhong, the chairman and chief executive of Nasdaq-listed Baidu, said yesterday.

The mainland's largest online search provider said its fast-growing mobile business helped drive its net profit to 3.55 billion yuan (HK$4.44 billion) in the three months to June, up from 2.64 billion yuan a year earlier.

We are in a very early stage of launching our international services and products

Revenue increased 58.5 per cent to 11.99 billion yuan from 7.56 billion yuan.

Baidu's mobile business, mostly search-related income, contributed 30 per cent to the company's revenue for the first time.

"We hold leading positions in the key mobile entry points of search, maps and app distribution," Li said.

"We are making investments to facilitate the seamless connection of users to services … which allows us to have a better understanding of user behaviour and [data] conversion for merchants."

That strategy aims to address a rapidly expanding domestic market.

Data released by the China Internet Network Information Center on Monday showed the number of mainland users accessing the internet through mobile devices reached 527 million at the end of last month, surpassing the 511 million doing so on their desktop and laptop computers.

Lucy Zhang, an analyst with internet consultancy iResearch, said advertising on its search platform remained Baidu's main source of income.

"Baidu can certainly increase its advertising income from the mobile search platform because customers on the PC platform are automatically treated as advertisers on the mobile side," Zhang said.

At Baidu's earnings conference call yesterday, chief financial officer Jennifer Li described the international market as "one of our strategic focus areas".

"We are in a very early stage of launching our international services and products in some identified markets," she said.

The Beijing-based company last week launched its Portuguese-language search service in Brazil, which marked a milestone in its bid for international expansion.

It also committed to invest in a research and development facility in the country over the next three years.

Ricky Lai, a research analyst at Guotai Junan International Holdings, said: "Brazil is a big opportunity for Baidu because of its huge population and growing economy."