Baidu shares plunge as revenue disappoints market

Image source, AFP

Image caption, Online search giant Baidu's revenue in the fourth quarter disappoints investors

12 February 2015

Mobile growth

Search revenue from mobile surpassed that from PCs for the first time in December, said chief executive Robin Li in a on Wednesday.

"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."

The company, which is often referred to as China's Google, expects revenue of up to $13.07bn yuan in the January to March period, compared to a market forecast of 13.62bn yuan.

Baidu has been facing stiff competition in the mobile space from the likes of e-commerce giants Alibaba and Tencent, while rivals Qihoo 360 and Sogou are growing fast in online search.

But the market leader has been investing heavily in marketing and content to keep up with rivals on mobile devices.

"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 added.

What is after-hours trading?

Image source, Getty Images

When investors buy and sell shares outside the regular opening hours of major exchanges
It exists because big financial institutions want to trade large blocks of shares 24 hours a day
Adopted in the 1990s by financial institutions and some rich investors; the growth of online trading led to ordinary investors being able to take part a few years later
Riskier than trading during regular hours - trading volumes are lower and share prices can be more volatile, meaning the spreads between the buying and selling prices of shares can be wider
With less information available it can be harder to work out what's behind some after-hours price movements, leaving small investors at a disadvantage
But potential profits can be higher