Google took over the search market after pioneers such as Lycos failed to keep up with changing trends. Baidu is seen as China’s answer to Google. But its slowness to adapt means it risks becoming a tech bygone like Lycos. A $3.6bn purchase of a live streaming platform represents a counter-productive attempt to avert that comparison.
Growth is elusive in China’s saturated market. A 1 per cent increase in Baidu’s third-quarter sales was enough to please markets on Tuesday. Longer term, Baidu faces falling advertising sales — its main source of revenue.
The business is losing out to local rivals ByteDance and Tencent, whose video platforms are attracting plenty of viewers. You cannot say the same for Baidu’s Netflix-style video streaming platform iQiyi. Its sales slipped in the third quarter, with ad revenues dropping more than a tenth.