Baidu cuts Q2 revenue forecast 10% in face of medical regulatory changes
Chief executive Robin Li Yanhong says range now 18.1-18.2 billion yuan, compared with earlier 20.1-20.58 billion estimate
Online search giant Baidu has reduced its second quarter revenue forecast by more than 10 per cent after half of its medical customers altered their advertising spending, amid ongoing regulatory uncertainties.
The Nasdaq-listed company now expects Q2 revenue to be 18.1 billion yuan (HK$21.3 billion) to 18.2 billion yuan, compared with an earlier estimated range of 20.1 billion to 20.58 billion.
“The revision...mainly reflects the short-term uncertainty surrounding the scope, timing and roll out of regulatory review of medical organisations ,” said chief executive Robin Li Yanhong during a conference call with analysts on Tuesday.
“Over half of our medical customers have temporarily reduced or delayed spend on our platform.”
The State Administration for Industry and Commerce launched a six-month crackdown on false online advertisement in May, after the death of 21-year-old Chinese cancer patient Wei Zexi, who had sought out a controversial treatment advertised among search results offered on Baidu.
“Over half of our medical customers have temporarily reduced or delayed spend on our platform.”
Li’s firm controls more than 80 per cent share of China’s online search market, but it was ordered by the government to take stricter measures to limit fake online adverts, including limiting the share per page to less than 30 per cent.
