Baidu revenue outlook falls short, shares plunge

26 October 2009 @ 06:16 pm EDT

China's leading Internet search company Baidu Inc warned that the transition to a new advertising technology would crimp revenue in the current quarter, sending shares plunging 11 percent.

A staff member of Baidu.com near the door at the company`s headquarters in Beijing in this picture taken on August 5, 2005.

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Baidu on Monday forecast revenue in the fourth quarter to range between $174 million and $180 million, below the average analyst estimate of $204.7 million, according to Thomson Reuters I/B/E/S.

The company said it expects moderate year-over-year growth in the fourth quarter due to the "temporary negative impact" anticipated from discontinuing its Online Marketing Classic Edition.

Baidu said it would complete the switch to its Phoenix Nest advertising bidding system on December 1.

Revenue in the three months ended September 30 totaled $187.3 million, a tad below the average analyst estimate of $189 million but higher than the 135.4 million a year-earlier.

Third-quarter net income rose to $72.2 million, or $2.07 a share, from $51.2 million, or $1.47 a share, in the same period last year.

Shares of Baidu fell 11 percent to $385.02 in after hours trade on Monday.

(Reporting by Alexei Oreskovic and Melanie Lee; editing by Gunna Dickson)