Mobile business investment crimps Baidu’s profit growth
Print Edition
Baidu Inc, which operates China’s most popular search engine, said yesterday that quarterly profit rose 1.3 percent as it invested to expand its fledgling mobile business.
The Beijing-based company earned 3 billion yuan (US$492 million) in the three months ended on September 30. Revenue surged 42.3 percent to 8.9 billion yuan but sales and administrative costs more than doubled, due mostly to mobile-related expenses. Development costs soared 77.5 percent.
Established Internet services such as Baidu are scrambling to develop wireless platforms as web surfers shift to going online via smartphones and tablets.
In July, Baidu said it would acquire a smartphone apps distributor, 91 Wireless, for US$1.9 billion.
“We will continue to invest aggressively in order to position ourselves well in this rapidly developing mobile market,” Baidu’s Chief Financial Officer Jennifer Li said in a statement.
China’s population of Internet users grew 10 percent over the past year to 591 million people as of the end of June. The number of users who surf the web on wireless devices rose at double that rate, jumping 20 percent to 464 million.
Baidu’s latest profit growth was below the double-digit rates of previous years but represented a rebound from the previous quarter’s rare 4.5 percent contraction in net earnings.
Baidu dominates traditional Internet search with nearly 80 percent of China’s market. But in mobile, it faces tough competition from companies such as Qihoo 360, which launched a rival in mid-2012.
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