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
“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.”
“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.”
He indicated that the company must now judge its performance by gross revenue, operating revenue and cash flows, rather than its top-line revenue.
Most robotaxi services in Chinese cities are currently made available at certain traffic-restricted areas. The cost of using these robotaxis amounts to just a fraction of the fare from an on-demand service with a human driver.
The contents of Baidu’s internal memo were first reported by Chinese tech media 36Kr.
Still, Baidu significantly narrowed its net loss to 146 million yuan in the third quarter last year, from 16.6 billion yuan in the same period in 2021.