Shares in China’s largest online search engine, Baidu, have fallen 10% in after-hours trading after it’s revenue for the last quarter came in below analysts’ expectations.
Baidu fourth quarter disappoints
Baidu’s fourth quarter 2014 revenue was 14.05 billion yuan ($2.26 billion), which missed most market forecasts of around 14.12 billion yuan.
The Chinese technology giant has also forecast that its revenue for the current quarter is likely to be well below analyst estimates, but as far as this quarter is concerned, the miss was mainly a result of users moving away from desktop PCs and instead using mobile phones and tablets.
The end result is that there is less space on the users’ devices to sell adverts to third-party companies, which hurts Baidu’s bottom line.
Mobile is growing
According to a statement issued by Baidu’s chief executive Robin Li, search revenue from the mobile segment surpassed that coming from PCs for the very first time in December 2014.
“For the upcoming quarter, our guidance reflects the combined impact of both the late timing of Chinese New Year this year and mobile’s growing traffic contribution, which monetises at a rate lower than that of PC” , he said.
“We expect mobile’s monetisation rate to trend up throughout the year.”
Baidu, which is sometimes called China’s Google, says it expects revenue of up to 13.07 billion yuan in the first quarter of 2015, slightly less than the market forecast of 13.62 billion yuan.
Baidu faces increased competition in the mobile segment from companies such as Alibaba, as well as rivals Qihoo 360 and Sogou which are rising quickly in online search. But Baidu still remains on top and is already investing in marketing and content to focus more on mobile.
“2015 will be an important year for Baidu as we execute on our plan and invest for the next phase of mobile growth.” Mr Li sai.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.