Baidu posts profit increase, vows to diversify

China’s leading search engine Baidu posted its first profit increase in three quarters as performance recovered from the recent crackdown on unqualified advertisers.

Profit in the second quarter surged 83 percent to 4.42 billion yuan (US$651 million) thanks to strong progress in its mobile app and newsfeed advertising.

Revenue grew 14.3 percent from a year ago to 20.87 billion yuan, as the amount of advertising spending from each paying advertiser also increased. 

Baidu chairman and chief executive officer Robin Li said the company will execute two strategic pillars, to strengthen mobile foundation and to lead in AI.

Chief Operating Officer Lu Qi has been driving the search engine giant’s transformation towards artificial intelligence as the company is working to extend its reach beyond its core business.

“Our Mobile Baidu App and our news feed product showed strong progress, and the online active customer base also posted solid increases — we will continue to drive operational efficiency on our platform and invest in the core strength of technology,”  Lu said.

BOCOM International said in a research note ahead of the earnings release that the company still has growth potential after its artificial intelligence and cloud computing business enters a more mature period.

Separately, it also announced today a partnership with PayPal to tap overseas merchants and catch up with rival Alibaba and Tencent’s digital payment services. Baidu Wallet will be accepted by around 17 million PayPal merchants globally.

Paypal will work with Baidu’s financial service group to expand its Chinese customer base through Baidu Wallet users. Baidu Wallet has about 100 million users, but still lags behind market leaders Alipay and WeChat Pay which both has more than 400 million active users.