The national economic slowdown in China has affected the internet industry as well. According to reports, Baidu Inc (ADR) (NASDAQ:BIDU) has posted below expectations profit amidst of slump in business growth in 1Q2015.
Road So Far
Baidu is the largest internet services and maps provider of China. The company has been trying to adapt the sudden rise in the usage of mobile phones for internet based services in the nation. The financial position of Baidu didn’t improve much from the last time as it posted reduced profit second year in continuation. Its revenues for the quarter amounted to $2.053 billion or RMB 12.725 billion. Even though the profit shows a reasonable increment of 34% on YOY basis, but Baidu’s revenue declined compared to last year’s performance.
If taken into consideration the previous four quarters, one can identify a gradual decline in Baidu’s quarterly revenues. Its growth rate was 59.1% in 1Q2014, 58.5% in 2Q2014, 52% in 3Q2014 and 47.5% in 4Q2014. Year 2014 brought in revolutionary changes in terms of mobile usage in China. Total mobile internet users overtook PC Internet users for the first time. Due to it, 50% of Baidu’s revenue was from mobile internet users in 1Q2015 compared to 37% during the same period last year.
It managed to earn a profit of $347.7 million or RMB 2.155 billion in 1Q2015, down 9.2% from 1Q2014. Net income for Baidu in the previous quarter was $395.1 million or RMB 2.449 billion, 3.4% down from 1Q2014. The senior leadership team of Baidu is completely aware of the transformation phase that internet market is going through right now.
According to Robin Li, CEO and Chairman, Baidu, the mobile internet continues to redefine the success for Baidu with 50% of its revenues have come from mobile users in 1Q2015. It will look forward to offering more mobile friendly services than the present in the coming quarters.
