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MarTech » Marketing Management » Baidu’s Q2 Profit Falls, Company Diversifying Away From Search

Baidu’s Q2 Profit Falls, Company Diversifying Away From Search

Earlier this week, Baidu announced Q2 2015 earnings. Total revenues grew 38 percent year over year to $2.67 billion. However, profit was down 2.5 percent to $559.6 million. The company is moving away from revenue reliance on search, which is becoming less profitable as usage shifts to mobile devices. Indeed, Baidu said that mobile drove 50 percent […]

Greg Sterling on July 29, 2015 at 9:19 am

baidu-magnifying-glass-ss-800

Earlier this week, Baidu announced Q2 2015 earnings. Total revenues grew 38 percent year over year to $2.67 billion. However, profit was down 2.5 percent to $559.6 million.

The company is moving away from revenue reliance on search, which is becoming less profitable as usage shifts to mobile devices. Indeed, Baidu said that mobile drove 50 percent of total revenues but was sequentially flat.

Baidu executives repeatedly referred in their earnings statements to the development of “the Next Baidu,” which will reportedly be mobile-centric and driven by more commerce and transactional revenue. The company describes it as the “O2O e-commerce opportunity.”

Below are selected top-level data from the Q2 earnings statement:

  • Baidu had 629 million mobile search users in June 2015, which represents 24 percent year-over-year growth
  • There were 304 million mobile maps users in June, 48 percent growth
  • The company recorded $6.5 billion in “gross merchandise value” (sales) in O2O services, representing 109 percent annual growth
  • TAC was $340 million (~13 percent of total revenue)
  • Cash and cash equivalents were $12.09 billion

In Q4 last year, Baidu (like everyone else) proclaimed itself a “mobile first” company. The company is dealing with some of the same pressures and shifting usage patterns in China that Google confronts in the US and other markets globally. Accordingly, Baidu has decided to diversify into e-commerce and a range of mobile services, including payments.

It’s worth noting, however, that Baidu’s 629 million mobile search users in China equals roughly twice the US population.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


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About The Author

Greg Sterling
Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.

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