Baidu spends 100m yuan on fledgling marketing firm, created by 25-year-old whiz kid in 2015
With its online advertising income under severe pressure, search giant turns to ‘Professor Li’ and his team to reignite marketing revenue
Baidu, the Beijing-based internet search giant, has splashed out nearly 100 million yuan on a fledgling marketing firm started just a year and a half ago by a 25-year-old Tsinghua University whizzkid.
Li Jing, who only founded Beijing Shoujiao Information Technology in July last year, will become Baidu’s youngest ever vice president after the takeover.
Li’s appointment comes just months after Baidu – which relies heavily on online advertising income – reported better-than-expected profit, but its first decline in revenue in the quarter ending September, since its US listing in 2005.
The company posted a 9.2 per cent increase in third-quarter net profit to 3.10 billion yuan, mainly on lower selling, general and administrative expenses. But the figures also revealed online marketing revenue declined 6.7 per cent year on year to 16.49 billion yuan.
Baidu had about 524,000 active online marketing customers during the period, representing a 15.9 per cent year on year decrease.
The company, run by chairman and chief executive Robin Li Yanhong, has been significantly affected by Chinese regulators’ efforts to put more stringent controls on medical-related paid search advertising since May, following public outrage over the death of university student linked to a cancer treatment he found as a result of an online search result on Baidu.