Personnel changes as Baidu reports losses
Baidu reported first quarter losses as macroeconomic challenges mount.
The company has replaced the head of its core search business while investment in artificial intelligence has not yet paid off.
It is Baidu's first quarterly losses since its IPO on NASDAQ in 2005 and shares tumbled 9.8 percent in after-hours trading on Thursday.
Net losses in Q1 were 327 million yuan (US$47.5 million) compared with a profit of 6.7 billion yuan in the same period last year.
Revenue rose 15 percent to 24.1 billion yuan and online ads income edged up 3 percent to 17.7 billion yuan. Marketing expenses also climbed following its CCTV New Year’s Eve Gala promotional activities.
Selling, general and administrative expenses surged 93 percent to 6.1 billion yuan.
"Despite government policies to improve the market for small and medium enterprises, we anticipate online marketing in the near term to face a challenging environment and we will take this opportunity to improve our monetization capabilities and review our businesses for operational efficiency," said chief financial officer Herman Yu.
Baidu said it will merge its search and mobile business to be headed by vice president Shen Dou, according to a letter to employees by chairman Robin Li after the earnings release. Former head of the search business unit Hailong Xiang, a 14-year veteran, has resigned.
Market watchers said this was a result of unsatisfactory performance as the search company lags behind rivals in offering multimedia content such as short videos and live-streaming.