Baidu's quarterly revenues to 31st December stood at 33.08 billion yuan, just ahead of the market's earlier predictions of 32.01 billion (data from Refinitiv).
The vast Chinese search engine, which is broadly equivalent to Google in the West, generates the majority of its revenues from Baidu PPC advertising. Now, following the Chinese government's decision to move away from its punishing zero-COVID strategy, Baidu is seeing advertisers return to Baidu pay-per-click (advertising) once again.
Western brands may have over-fixated on WeChat for Chinese social media marketing in recent years. However, Baidu PPC is still a highly valid and important part of any Chinese digital marketing mix, particularly in this vast and powerful nation of netizens, where over 1.04 billion Chinese are online. This is particularly the case for B2B brands that are seeking to develop new business in the vast and complex China market, where digital marketing strategies need to be particularly well thought-out and highly integrated to successfully compete.
Baidu's CEO, Robin Li, said that 2022 had been a particularly challenging year, but that for 2023, Baidu saw a clear route to accelerate its revenues once again, and to leverage the opportunities presented by China's expected economic recovery.
Expectations are high for Baidu's answer to ChatGPT.
This year, the markets are also hotly anticipating the launch of 'Ernie Bot' (wénxīn yīyán 文心一言 in Chinese), Baidu's answer to ChatGTP. Baidu is widely seen as having the best platform to launch China's most successful Chinese-language AI bot, thanks to its significant existing expertise in AI technologies.
At a recent developer conference, the excitement about the highly secretive project was palpable, although there are already questions about how China's alternative to ChatGTP could be used in an environment of government censorship, be positioned to make money, and - potentially - exported to global audiences amidst US technology export controls.
Other key highlights from Baidu's quarterly results included:
- A 1% drop (to 25.7 billion yuan) for Baidu Core's business, including cloud licensing, search-based advertising and autonomous driving development.
- Non-online marketing revenues grew by 11% to 7.6 billion yuan, driven by cloud and AI businesses
- Online marketing revenues fell by 6% (to 18.1 billion yuan) in the same period, because of the punitive zero-COVID controls imposed by Beijing across China.
- An investment of 18.8% from 2022 revenues (23.3 million) into R&D, with focused investment in Ernie Bot, which will be integrated across its full market mix, including search engine marketing, cloud computing offers and smart cars.
Baidu has also announced that it will be issuing a new share buy-back program worth up to $5 billion.
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