Baidu shares slip over online platform transition
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Shares of Baidu Inc dropped more than 13 percent on the Nasdaq exchange on Monday after it said its income in the fourth quarter will be affected with the switch of its new online marketing platform.
China's biggest search engine provider said revenue for the fourth quarter will be between 1.19 billion yuan (US$174 million) and 1.23 billion yuan, which corresponds to 32 to 36 percent year-on-year growth. Previous estimates by Reuters analysts were expecting the figure to be 1.38 billion yuan.
Its shares lost 13.16 percent to US$375.99.
"We see a short-term negative impact as some customers may hold off on spending on Phoenix Nest," Robin Li, chairman and CEO of Baidu, said at a conference call yesterday.
Last year Baidu launched the trial of its new Phoenix Nest technology, which allows advertisers to increase monitoring of search results. It is expected to complete the transition from its original online marketing system to Phoenix Next by the end of the fourth quarter. It now covers about 70 percent of Baidu customers and contributed 20 percent to its total revenue.
Profit for the third quarter rose 42 percent to 492.9 million yuan, or 14.14 yuan per share. Revenue rose 39.1 percent year-on-year to 1.28 billion yuan.
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