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Baidu founder Robin Li warns new businesses are still bleeding cash, looks to sharpen company’s focus on profits
- The Baidu co-founder and chief executive said many of the company’s new businesses are still loss-making operations
- The internet and AI giant has struggled to eke out a profit from high-profile investments such as autonomous driving
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Che Panin Beijing
Robin Li Yanhong, co-founder and chief executive of Baidu, has warned that the company is burdened by certain loss-making enterprises, which makes it imperative for the Chinese internet and artificial intelligence giant to sharpen its focus on profits.
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“Many of Baidu’s new businesses are losing money,” Li said in a speech in December that was the subject of an internal memo seen by the South China Morning Post.
“After a long time, people feel losing money is justified,” he said, referring to those business activities. “Many then forgot why we even lost 1 billion yuan [US$145 million] or 5 billion yuan a year to do this.”
Once one of the most valuable Chinese tech companies, on a par with Post owner Alibaba Group Holding and Tencent Holdings, Baidu has struggled to eke out a profit from high-profile investments such as autonomous driving. Recently, Baidu retired its on-demand local services platform Baidu Nuomi to conclude an eight-year attempt to carve out a foothold in a market largely dominated by Meituan.
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“In the short term, losses can be blamed on high inputs for fast growth,” Li said. “But in the long run, this won’t work.”
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He indicated that the company must now judge its performance by gross revenue, operating revenue and cash flows, rather than its top-line revenue.
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