Baidu, China’s answer to Google, has its own search under way for new business lines. It is struggling to increase revenues via advertising and video streaming against tough local competitors. Baidu should abandon its hopes of catching up with rivals and find new peers instead.
One problem: Baidu has failed to track the shift in Chinese users from desktops to mobile — giving rivals such as Tencent the lead. Now, smaller peers have started chipping away at Baidu’s ad sales, its main source of revenue. Viewers on video platforms such as ByteDance are growing. Baidu has fought back by splashing out on a video-streaming business and launching several short video apps in a bid to salvage top-line losses.
Yet ploughing cash into these areas has brought little return, setting a low bar for Wednesday’s fourth-quarter results. A mere 5 per cent sales increase topped expectations. Although demand for streaming video is high Baidu’s Netflix-like affiliate, the lossmaking iQIYI, lost subscribers quarter on quarter. Full year, both its streaming video and its core search revenues fell.