What Are Baidu’s Top Priorities?
Driving operational efficiency
Baidu (BIDU) has outlined a number of priorities that will guide its operations as it seeks to generate long-term shareholder value. Baidu’s priorities include driving operational efficiency by being more disciplined in the administration of costs, according to CFO Jennifer Li during the company’s 2Q17 results. The company’s other priority is investing in technology innovation to enable it to introduce more products and strengthen existing ones.
Interested in BABA? Don't miss the next report.
Receive e-mail alerts for new research on BABA
Online advertising is Baidu’s bread and butter
Online marketing services, which are essentially online advertising services, contribute the bulk of Baidu’s revenue. In China (MCHI), Baidu’s domestic market, the company competes with Sohu.com (SOHU), Tencent (TCEHY), Sina (SINA), and Alibaba (BABA) in the online advertising sector.
Thus, when Baidu talks about driving growth through innovation, a lot of effort will likely go into improving its online marketing services business. Of the $3.1 billion (or 20.9 billion yuan) in total revenue the company generated in 2Q17, $2.6 billion came from online marketing services, and the rest came from what the company reports as other services.
Mobile leads top-line gains
Total revenue for the quarter was up 14.3% year-over-year with the growth being supported by solid mobile performance. Mobile revenue accounted for 72% of total revenue in the latest quarter, up from 62% of revenue in the corresponding quarter last year.
Baidu demonstrated strong cost control in 2Q17 as its EPS (earnings per share) nearly doubled year-over-year in the quarter. The company posted adjusted EPS (earnings per share) of 16 yuan (or $2.36) for 2Q17, up from 8.08 yuan a year earlier.