Baidu reports 24 per cent increase in first-quarter revenue to 15.82 billion yuan

Online search giant’s net profit down 18.9 per cent to 1.89 billion yuan

PUBLISHED : Friday, 29 April, 2016, 9:03am
UPDATED : Saturday, 30 April, 2016, 12:46pm

Robin Li Yanhong, the chairman and chief executive of Baidu, sees a steady build-up of investments in the Chinese online search giant’s artificial intelligence (AI) initiatives, including autonomous driverless cars, as more milestones are met by the company.

“Our multi-year investment in artificial intelligence, particularly in deep learning, continues to pay dividends across many products,” Li said in a conference call with analysts on Friday.

Baidu Brain, touted to be the world’s largest and most powerful high-performance computer network for online queries, “supports all product lines and now enable us to offer a more relevant result to users, higher click-through rates to customers, faster delivery time for Takeout Delivery [online-to-offline local service], highly naturalistic text-to-speech features for news users, just to name a few”, Li said.

“We believe we are leading in [AI], not only in China but around the world. This enables us to do disruptive things like autonomous driving,” he said

He added that “when the team hits certain milestones over time, [the] budget might go up”.

Nasdaq-listed Baidu successfully tested in December its autonomous driving technology over a 30-kilometre route around Beijing.

That project has been led by the company’s Institute of Deep Learning since 2013, joining other major companies working on driverless car projects like Apple, Tesla and Google.

Earlier this month in Beijing, Chinese entertainment and consumer technology company LeEco unveiled its own self-driving electric car.

“We believe that the automobile is the next major computing platform, and that advances and innovation will happen quickly especially here in China,” Li said. “Baidu’s strengths in high-definition mapping and in deep learning-powered computer vision will prove to be decisive advantages.”

“We are on track now to deploy autonomous vehicles powered by Baidu technology in 2018, with production at scale by 2020,” he said.

Jefferies research analyst Karen Chan said Baidu recently formed a self-driving [research and development] team in California’s Silicon Valley to complement work that is being done on the mainland.

Beijing-based Baidu on Friday reported solid first-quarter revenue on the back of strong mobile traffic and an increase in active online marketing customers.

The company was the first of China’s dominant triumvirate of internet companies – South China Morning Post owner Alibaba Group and Hong Kong-listed Tencent Holdings are the others – to post their financial results for the first three months of this year.

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Total first-quarter revenue for Baidu increased 24 per cent to 15.82 billion yuan (HK$18.89 billion), up from 12.05 billion yuan in the same period last year. That was on the high end of Baidu’s guidance range announced in February of between 15.41 billion yuan and 15.97 billion yuan.

Its first-quarter net profit, however, was down 18.9 per cent to 1.89 billion yuan, from 2.45 billion yuan a year earlier, due to higher operational costs for online-to-offline transaction services and increased content expenses at its iQiyi online-streaming video business.

Mobile revenue accounted for 60 per cent of Baidu’s first-quarter sales, compared with 50 per cent a year ago. Mobile search monthly active users reached 663 million at the end of March, up 9 per cent year on year.

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For the second quarter, Baidu forecast its revenue to be from 20.11 billion yuan to 20.58 billion yuan.