Sharpened focus on mobile and AI pushed up sales as well as profit for Chinese search engine Baidu for the quarter ended June. The quarter fared well for e-commerce giant Amazon too in terms of sales, but the profit slumped owing to rapid expansion into new shopping categories.
China’s Baidu profit jumps as focus on mobile, AI narrows
Chinese internet search engine provider Baidu Inc has reported a jump in quarterly earnings, recovering from a string of regulatory investigations last year, as sharpened focus on mobile and artificial intelligence (AI) services drives growth.
The result comes as Baidu narrows its attention to just a handful of areas outside its core business, while the other two of China’s big-three tech firms – Tencent Holdings Ltd and Alibaba Group Holding Ltd – spend billions of dollars expanding into sundry sectors in multiple markets.
Baidu said net profit hit 4.41 billion yuan ($654 million) in the three months through June, 83.5 percent more than a year earlier when profit dropped by a third in what was the firm’s weakest result since listing in New York in 2005.
Last year’s profit drop coincided with investigations into how third parties used Baidu’s advertising service, prompted by the death of a cancer patient who found ineffectual treatment via ads placed with Baidu.
The probe in turn led to restructuring at Baidu which diverted resources from less-profitable ventures into AI, big data, cloud and video services – all of which contributed to its second-quarter profit jump. The firm expects further growth with third-quarter revenue as much as 30 percent over the same period last year.
Breaking down second-quarter results, Baidu said revenue rose 14.3 percent to 20.87 billion yuan.
(By Cate Cadell)
Amazon plows ahead with high sales, profit plunges
Amazon.com Inc on Thursday reported a jump in retail sales along with a profit slump, as its rapid, costly expansion into new shopping categories and countries showed no sign of slowing.
The world’s largest online retailer posted second-quarter revenue of $38 billion, up 25 percent from a year earlier. The breakneck growth stood in contrast to the fate of many brick-and-mortar rivals, who have struggled to find their footing as more people shop online.
Yet Seattle-based Amazon posted a 77 percent drop in quarterly income, and even said it could lose up to $400 million in operating profit during the current quarter. Beyond reflecting retail’s notoriously thin margins, the forecast signaled Amazon would invest heavily to maintain its dominance.
Shares – up nearly 40 percent this year – fell 3.2 percent to $1,012.68 in after-hours trading. The company had earned 40 cents per share instead of $1.42 as analysts had expected, according to Thomson Reuters.
“Q3 is generally a high investment period,” Chief Financial Officer Brian Olsavsky said on a call with reporters, citing spending on fulfillment and hiring to prepare the company for the Christmas holiday rush. He added, “Our video content spend will continue to grow, both sequentially and quarter over quarter.”
Olsavsky said video content included with Prime membership has helped Amazon retain subscribers and persuade those on a free trial to sign up for $99 per year in the United States. A cornerstone of the company’s strategy, Prime encourages shoppers to buy more goods, more often from Amazon.
(By Jeffrey Dastin and Rishika Sadam)