But adjusted earnings per share came in at $1.43, beating the median forecast of $1.28 in a poll of analysts by Bloomberg News. NASDAQ-listed Baidu, often portrayed as the equivalent of Google, dominates search in China and is looking to move into online-to-offline services, such as food delivery and movie ticket booking.
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“With mobile accounting for almost two-thirds of search traffic and China squarely in a mobile age, is pioneering and redefining the mobile experience for users in”.
China’s three largest Internet companies are spending heavily to try and grab a slice of an “O2O” or online services market expected to grow to 7.2 trillion yuan by 2017, according to IResearch. Gross merchandise value (GMV) for transaction services mounted to $9.5 billion (RMB 60.2 billion), which represents an impressive 119% increase YoY. Now, the search engine giant will have 25% stake in the country’s biggest travel site Ctrip, which will take about 48% stake Qunar. “We see tremendous potential ahead for the industry and remain very committed to the online travel space”, Baidu chief executive Robin Li said on a conference call. “It does not give us much revenue, it’s losing a lot of money right now, but we think going forward it will become more and more important and will become part of our search business”.
For the current quarter, the company forecast revenue of 18.20 billion yuan ($2.86 billion) to 18.75 billion yuan, compared with analysts’ projected 18.88 billion yuan in revenue, according to Thomson Reuters. Operating profit fell 36% from a year ago to $2.89 billion (RMB 18.38 billion) and net income registered a 26.7% decline to $447 million (RMB 2.84 billion).
Moody’s Investors Service says that Ctrip.com worldwide, Limited’s (unrated) declared completion of a share exchange with Baidu Inc.
Shares of Baidu were down since the company revealed its plans to spend billions of dollars on its daily discount platform Nuomi. Baidu said this week its Qunar travel site will form an alliance and swap shares with rival Ctrip.com worldwide Ltd. Alibaba and Tencent have backed similar mergers to try and curb competition, such as the tie-up between Meituan.com with Dianping.com announced this month.
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In July, the company said it expected sales, general and administrative expenses to climb 90 percent in the second half from the first six months of the year.
