Baidu’s latest financial report shows a decline in revenue in the second quarter of this year, with online marketing revenue dropping by 15 percentage points year-on-year. As a result of this news, Baidu’s stock price plummeted on Thursday, August 21st, with the company’s valuation hitting the lowest level among major internet enterprises in China.
On August 20th, Baidu released its mid-term performance report, with total revenue at 32.7 billion yuan, a 4% decrease year-on-year.
Among this, Baidu’s core revenue was 26.3 billion yuan, down 2% year-on-year; online marketing revenue was 16.2 billion yuan, a 15% decline, indicating that the growth of the advertising business remains weak; non-online business revenue led by AI cloud increased by 34% year-on-year, surpassing the 10 billion mark for the first time; iQIYI revenue was 6.6 billion yuan, down 11% year-on-year.
On that day, Baidu said that the main business unit revenue declined by 1.6%, with factors dragging down the online marketing revenue by 15% in the quarter, while the revenue of the video streaming service iQIYI dropped by about 11%. Management expects that the performance in the second half of the year will further deteriorate, with advertising revenue in the third quarter possibly declining by 20%-25% year-on-year.
Affected by this news, on August 1st, Baidu’s Hong Kong-listed shares fell by more than 3%, and the company’s stock is currently trading at a price-to-earnings ratio of only about 9.7, ranking as the lowest among all profitable companies in the Hang Seng Technology Index.
The financial headline account “Lingtong Society Research” stated that Baidu is currently facing multiple challenges. In the search field, social applications like Xiaohongshu and TikTok under ByteDance are competing for user attention and advertising revenue, while the economic and real estate market downturn is also prompting Baidu to cut advertising expenses.
In the field of artificial intelligence (AI), DeepSeek’s breakthrough based on open-source models and ultra-low training costs is also undermining Baidu’s proprietary technology practices that have been promoted for many years.