China’s leading internet search provider Baidu announced on Tuesday that its second‑quarter revenue declined 4% year‑over‑year to 31.33 billion yuan (about $4.65 billion), falling short of analysts’ consensus estimate of 31.96 billion yuan.
Advertising revenue under pressure
The shortfall was driven primarily by a 19% drop in the online marketing services segment, which generated 13.1 billion yuan in the quarter. A prolonged downturn in China’s property sector and reduced consumer spending have prompted many businesses to cut marketing budgets, directly impacting Baidu’s core advertising revenue.
In addition, the company noted that spending patterns during China’s mid‑year “618” shopping festival shifted, with e‑commerce platforms allocating more funds to user subsidies rather than traditional traffic‑acquisition campaigns, further weighing on ad demand.
Growth in AI‑linked cloud services
Despite the advertising weakness, Baidu highlighted growth in its AI‑linked cloud services, which helped offset some of the revenue decline. The firm continues to invest in generative‑AI offerings and cloud infrastructure as part of its broader strategy to diversify beyond search advertising.
Shares of Baidu, listed on the New York Stock Exchange, fell about 3.5% in pre‑market trading following the earnings release.
Exchange rates used in the report: $1 = 6.7423 Chinese yuan renminbi.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
