Lately, shares of Chinese internet titan Baidu increased more than 4% during after-hours trade after better than anticipated outcomes for the third quarter. The revenue reported was $3.93 Billion (28.08 billion yuan), as per the earnings release exchange rate that was relatively flat yearly. Exclusive of items, earnings per share were at 12.61 Yuan, surpassing market prospects, but representing a decline of 34% yearly. Analysts surveyed by Refinitiv projected revenue of 27.49 billion yuan and modified earnings per share were 7.88 yuan. Baidu has encountered many tailwinds in 2019 including a declining Chinese economy in the middle of an extended U.S.-China trade battle, increased rivalry from new search players such as TikTok owner ByteDance and escalated inquiry from watchdogs on the advertising market in the second-largest economy globally.
The shares of Baidu fell by 32% this year. But the Chinese company has been seeking to expand revenues, and decreased dependency on its main search business, by expanding in areas such as AI (artificial intelligence), driverless-cars, and streaming. The first two are considered as future growth regions for the firm, but iQiyi—Baidu’s video platform—has already delivered the goods. The revenue from iQiyi attained $1.04 Billion (7.4 billion yuan), which was up by 7% yearly, while subscribers climbed by 31%. iQiyi—which is listed individually in the U.S.—but is majority-owned by Baidu reported its shares to jump more than 4%.
Similarly, Baidu—which is also called “China’s Google”—looked for a way forward. A few weeks back, Robin Li—CEO and Founder of Baidu—went so far to assert that “AI will give people eternal life.” Li might have made a faux pas when he cited people and instead meant Baidu. His belief that the future will be transformed by AI has made Li bet his company’s future on that notion. Li’s comments say more about Baidu as it does on how the internet use in China has changed than the U.S. and also why financiers have, for the time being, have given up on the firm’s shares.