Baidu Inc. is convinced of their choice of advertisement regarding the internet driven by government as they reported that their revenue for this quarter did not meet their estimate.
The sales were projected at 2.6 percent in the fourth quarter after the biggest search engine of China raised the requirements of registration for the marketers and reduced the ads that were displayed with the results. The company incorporated these measures to be in accordance with the restrictions regulated after the scandal that involved medical advertisers. This scandal had provoked a serious outrage on social media.
Jennifer Li, the Chief Financial Officer said that all these transformations have been completed and currently the company will be investing in video content and avail artificial intelligence services. Qi Lu was appointed as the President last month and he has ensured that the company will be reshaped and all its products will be expanded to cope up with the competition given by juggernauts like Alibaba group Holding and Tencent Group Holdings.
The president Qi Lu also said that the current quarter has reset its base of revenue, particularly pertaining to the search business. The company is making commendable efforts to place the client’s requirements in proper place and the impact of revenue is well behind them.
In the after-hours trading, the shares of the company rose by one percent. The fourth quarter revenue has been estimated to be 18.21 billion yuan, which is equal to 2.62 billion dollars. The net income for certain items was 4.61 billion yuan, while the analysts estimated it to be 2.52 billion yuan.
But a recovery could be achieved only slowly. The revenue for the annual front climbed to 6.3 percent, which is the slowest pace that has ever occurred till date. The growth of revenue for Baidu even in the current quarter is expected to be the slowest. The company has asked the investors to expect a net sale that will be in the range of 16.48 billion yuan to nearly 17.03 billion yuan in the current quarter, which will represent a growth from 4.2 to 7.6 percent. The analysts predict a growth rate of 7.3 percent.
The New Street Research analyst, Kirk Boodry has said that the extremely important case for Baidu is that it receives boost from the regulatory ends in the top lines. But they are focusing on the growth gradually.
For the survival of the business in the long term, Baidu has intended to use the search and user data and make use of the artificial intelligence platform to build various products.