Baidu posts 25 per cent rise in quarterly revenue as it continues pivot into AI and cloud services

Revenues climbed to 28.1 billion yuan in the first quarter, boosted by ads on its core search and video streaming platforms
Once part of China’s Big Tech triumvirate, Baidu has fallen behind in the mobile era

Baidu

ReutersandBloomberg

Published: 6:40pm, 18 May 2021

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Baidu, the Chinese search giant that is shifting into artificial intelligence, reported quarterly revenue that beat analysts estimates, extending its recovery from the Covid-19 pandemic.

Revenue climbed 25 per cent to 28.1 billion yuan (US$4.4 billion) in the three months ended March, compared with the average 27.3 billion yuan of estimates. Net income surged to 25.7 billion yuan, mostly boosted by gains in the value of long-term investments, including in recently listed Kuaishou Technology.

The Beijing-based company’s aggressive push into cloud services, artificial intelligence, autonomous driving and smart transport technology has helped grow its non-advertising revenue and offset competition to its core search platform from Alibaba Group Holding and ByteDance.

“Baidu’s sales mix is likely to shift further away from its traditional search advertising business as growth at its non-marketing initiatives continues to be much stronger,” said Ling Vey-Sern and Tiffany Tam, analysts at Bloomberg Intelligence.

Baidu Inc's Chairman and Chief Executive Officer Robin Li Yanhong (L) attends an event marking the company's listing on Hong Kong Stock Exchange, at its headquarters in Beijing, China March 23, 2021. Photo: Reuters

Founder Robin Li has in recent years sought to pivot Baidu away from search to reposition itself as an AI company with autonomous driving ambitions.

Once part of China’s internet triumvirate alongside Alibaba and Tencent Holdings, Baidu has fallen behind in the mobile era, where the effectiveness of its search service has been crippled by super-apps like WeChat creating siloed ecosystems.

To compete, Baidu’s core search product is morphing into an all-purpose platform hosting an array of content from news articles to live-streams and short videos, essentially emulating those apps. It last year agreed to pay US$3.6 billion in cash for Joyy’s live-streaming video business in China is aimed at regaining lost ground to the likes of TikTok owner ByteDance.

Its Netflix-style unit iQiyi. reported first-quarter revenue of 7.97 billion yuan, topping the 7.67 billion yuan average of estimates, after drawing more users. Sales in the three months ending in June will be between 7.21 billion yuan to 7.65 billion yuan, compared with an estimated 7.52 billion yuan.

04:07

China’s automated driving technology speeds ahead with research by search engine giant Baidu

It’s also making a big push into autonomous driving, betting on the smart vehicles of the future. In January, the company announced it’s teaming up with Zhejiang Geely Holding Group to produce smart electric vehicles, prompting analysts to hike their value estimates for Baidu’s self-driving unit Apollo.

The venture, Jidu Auto, aims to spend 50 billion yuan over the next five years to develop smart-car technology and will hire as many as 3,000 employees for the project over the next two to three years, the company said last month.

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