Baidu focuses on AI as founder Robin Li hires new management team

After a turbulent 2016, during which 13 per cent was wiped off Baidu’s market value, founder Robin Li needs all the help he can get to put the dominant search engine operator in the world’s largest internet market back on track.

During the past four weeks Li has rehired Melissa Ma, his wife and lifelong business partner, and poached at least three executives from Microsoft, Xiaomi and a Chinese local startup to join his senior management team, underscoring the company’s push to regain its traction after an advertising scandal in May destroyed consumer confidence and provoked a rare rebuke from the Chinese government.

“The addition of Microsoft’s Lu Qi as chief operating officer deepens Baidu’s management depth. In particular, his experience at Microsoft and background in artificial intelligence allows him to take a more active role in operations and frees up [Robin Li] to work more on strategic issues,” said Kirk Boodry, an analyst with New Street Research, which has a “neutral” recommendation on the stock.

“We also think this highlights Baidu’s focus on new technologies moving forward as the choice of COO does not appear to give special consideration to the core search segment. And that makes sense as we expect growth in the search business to moderate as the move to mobile has resulted in a more competitive market for advertising budgets from social media platforms like Weixin, QQ and Weibo,” he said.

Boodry added that his firm is not changing the neutral rating as it is still cautious on the stock because of slower search revenue growth, a situation that has not changed.