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Baidu's quarterly revenue tops estimates on new business push
[BEIJING] Baidu Inc posted quarterly revenue that topped analysts' estimates as it pushes into new businesses such as news aggregation to overcome government restrictions on web advertising at China's biggest search engine.
Revenue for the fourth quarter was 18.21 billion yuan (S$3.75 billion), compared with estimates for 18.17 billion yuan, Baidu said in a statement. Net income, adjusted for certain items, was 4.61 billion yuan, compared with the 2.52 billion yuan average of analyst estimates.
New President Qi Lu is preparing to reshape Baidu and expand products using artificial intelligence as the government cracks down on advertising, especially from the lucrative medical sector. While Baidu remains the biggest search engine in the country, smaller rivals like Sogou as well as giants Alibaba Group Holding Ltd and Tencent Holdings Ltd are gaining ground.
While Baidu has to fend off these challengers, it also has to grapple with decelerating growth. Annual revenue climbed at the slowest-ever pace.
"Baidu is at the forefront of AI development in China as it has accumulated a large database of text, image and audio in optimising its deep-learning based algorithm," analysts at Jefferies Group led by Jessie Guo said in a report.
Building up its pool of customers is vital for Baidu as it attempts to create world-leading artificial intelligence services. AI systems learn faster when given more real-world material, such as photos and search terms submitted by users. It had 665 million mobile users as of Dec 31, compared with 657 million a year earlier.
Baidu expects to generate 16.48 billion to 17.03 billion yuan in revenue in the first quarter of this year, less than 10 percent year-over-year growth. Analysts on average had projected 16.97 billion yuan in sales, according to data compiled by Bloomberg.
Mr Qi has also been named Baidu's new vice chairman, the company said. Greg Penner, who had been on the board since 2004, will step down.