Chinese search engine operator Baidu beat market estimates for fourth-quarter revenue (27.2 billion yuan) and profit on Thursday, as its core online marketing business stayed resilient and revenue surged in its Netflix-like streaming service iQiyi.
Baidu is betting its focus on streaming and new areas such as artificial intelligence (AI) will boost revenue and offset lower ad sales from real estate, finance and other sectors impacted by China’s economic slowdown. The company, which is trying to cut its dependence on its core search business, spent heavily on content for iQiyi and promotions to attract new customers last year as its online ad business showed signs of pressure.
Baidu will begin expanding its AI capabilities, such as smart speakers and autonomous driving, to enterprise and government customers to boost profits.
Revenue from iQiyi, in contrast, jumped 55% to 7 billion yuan. Content costs however nearly doubled to 7.3 billion yuan, mostly for iQiyi, and the company expects such expenses to rise in 2019.