Baidu rolls out another quarter of strong profit

Baidu has released financials for the last three months with its news product leading the charge for the Chinese search giant.

Total revenues stood at $3.93 billion, increasing 32% year-on-year, while mobile represented 77% of total net revenues, compared to 72% for the second quarter of 2017. The core business brought in $3.03 billion, a 28% rise, while net income was $967 million.

“We had another strong quarter in Q2 with search exhibiting robust revenue growth driven by AI-powered monetization capabilities and Baidu feed continuing strong traffic and monetization momentum,” said CEO Robin Li.

The potentially problematic news app, a similar proposition to the Facebook newsfeed, seems to have successfully negotiated regulatory landmines, reaching 148 million daily active users in June 2018, up 17% from the same period last year. While competitive offerings have been struggling to meet the censorship demands of the Chinese government, Baidu seems to have bowed suggesting there might be more successful numbers over the coming months. Competing video platform Bilibili was one which fell short of government expectations, leading to the app being temporarily removed from app stores by authorities.

The DuerOS, Baidu’s smartphone operating system based on an Android fork, had another successful period with the installed base reaching 90 million devices. Government officials might be keeping a close eye on the situation here, as a viable alternative to Android would be welcomed. AI investments across the Baidu business will improve capabilities here, as the team sign new partnerships with various different segments.

Baidu has now formed strategic partnerships with 20 global and domestic auto OEMs, including the BMW, Daimler and Ford. The autonomous vehicle space is a growing area, though other wins for the operating system are focused around the smart speakers. Not only does Baidu claim the DuerOS-powered Xiaodu Smart Speaker sold out 10,000 units within 90 seconds of its first two online sales, a partnership with InterContinental Hotels Group takes the smart speakers, and more importantly the OS, into the world of smart hotel rooms.

With the voice user interface set to become more important in the digital ecosystem over the next few years, DuerOS is certainly an area worth keeping an eye on.