After 1/3-area revenue drop, Baidu warns China ad curbs to hit fourth-area more difficult

Baidu stated sales should slip as much as four.6 percentage inside the October-December period, following the zero.7 percentage 0.33-quarter drop it reported on Thursday. although the latter became better than analysts had expected, the caution become sufficient to ship stocks down as an awful lot 4 percentage prolonged big apple buying and selling.

though internet earnings remained strong remaining quarter, the sales slowdown comes as China's biggest seek engine, with a market fee of about $60 billion, rides out a public and regulatory backlash. earlier this year it changed into at the middle of a national media outcry whilst a student with a fatal cancer blamed Baidu commercials for steering him to suspect, in the end ineffectual treatment.

Regulators spoke back through slapping curbs at the firm's moneymaking healthcare advertising and marketing enterprise.

leader government Robin Li said on an profits name Baidu is not going to regain floor lost within the modern-day "challenging" period until early next 12 months. Baidu anticipated fourth-quarter revenue may be 17.eighty four-18.38 billion yuan ($2.sixty three-2.71 billion) - 4.6 percentage to at least one.7 percent underneath the same length a 12 months earlier.

"q4 is what we keep in mind to be the bottom," stated chief monetary Officer Jennifer Li. "we can see a more said effect over the subsequent sector."

Reflecting the brand new guidelines, Baidu stated the number of advertising purchaser dropped sixteen percent within the 1/3 zone.

Jennifer Li stated the pool of advertisers to be had to Baidu's core enterprise was nonetheless huge, but conceded the new regulations might have an enduring effect. "due to this absolutely strict control...a number of the customers will now not be able to do commercial enterprise with us," she stated.

For the 3 months ended September, Baidu revenue fell to 18.25 billion yuan. The drop changed into barely smaller than the 1 percent fall anticipated by using a Thomson Reuters survey of 15 analysts, whilst internet earnings rose 9 percent to 3.10 billion yuan.

Having flagged in advance this year that the brand new guidelines might affect sales, Baidu stated this month it would establish a $3 billion investment fund centered on mid- and overdue-degree deals in the net sector in a look for new business lines with growth ability.

Baidu has also placed lengthy-term bets on fields like synthetic intelligence or even computerized driving, however these projects are nevertheless some distance from profitability.

all through the convention name, Robin Li reiterated the employer's dedication to analyze and development initiatives, pronouncing that the business enterprise is on target to begin small-scale manufacturing of a Baidu self reliant vehicle with the aid of 2018.