Baidu announced Q2 2015 earnings earlier this week, revealing that their profit is down 2.5 percent to $559.6, despite their total revenues up by 38 percent year over year to $2.67 billion.
It seems that the company has decided to begin moving away from relying on search-based revenue, which has become less profitable as usage shifts to mobile devices. Baidu stated that mobile drove half of the total revenues they got, but was sequentially flat.
The earning statements that Baidu executives repeatedly referred to dealt with the development of “the Next Baidu,” which will apparently be more mobile related, and driven by more commerce and transaction revenue. According to Baidu, it was described as the “O2O e-commerce opportunity.”
Here are some of the selected top-level data from the Q2 earnings statement:
- Baidu had 629 million mobile search users in June 2015, which represents 24 percent year-over-year growth
- There were 304 million mobile maps users in June, 48 percent growth
- The company recorded $6.5 billion in “gross merchandise value” (sales) in O2O services, representing 109 percent annual growth
- TAC was $340 million (~13 percent of total revenue)
- Cash and cash equivalents were $12.09 billion
Back in Q4 of 2014, everybody, including Baidu, said they were a “mobile first” company. They aren’t the only ones dealing with pressure of shifting search patterns. Google, along with other markets around the world are dealing with the same thing. Baidu has chosen to diversify into other services, such as e-commerce and a range of mobile services, which also includes payments.