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Examining Baidu’s Mobile Strategy

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Dec. 19 2017, Updated 6:05 p.m. ET

Mobile to represent 82% of online advertising budgets

Mobile is expected to continue fueling the growth of the digital advertising industry in China (MCHI), thanks to deepening smartphone penetration because of low-cost handset brands such as Huawei, OPPO Electronics, and Nokia (NOK).

According to business intelligence company eMarketer, mobile will account for 60% of all media advertising budgets in China by 2021. That year, mobile is predicted to account for 82% of total digital advertising budgets in the country.

The growth of mobile advertising spending in China is largely attributed to the mobile strategies of the country’s leading Internet companies, Baidu (BIDU), Alibaba (BABA), and Tencent (TCEHY).

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Baidu working on strengthening mobile foundation

The chart above shows mobile’s growing contribution to Baidu’s revenue. As digital advertising budgets shift to mobile, Baidu has been working on strengthening its mobile foundation, a process that continued in 3Q17. Referring to the company’s mobile strategy, Baidu CEO Robin Li said, “In the third quarter, we made good progress in our strategic pillars to strengthen our mobile foundation and lead in AI.[1.artificial intelligence] On strengthening our mobile foundation, our strategy to leverage Baidu’s leading AI technologies to increase the user scale and user stickiness of Mobile Baidu is showing measurable results.”

Mobile accounted for 73% of Baidu revenue

Baidu’s 3Q17 report showed the results mentioned by Li. The company reported that mobile accounted for 73% of its revenue in 3Q17. Mobile represented 72% and 64% of revenue in 2Q17 and 3Q16, respectively.

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