China's dominant search engine Baidu Inc reported $677.1 million revenue for the first quarter, which is up 75 percent compared to the same period a year ago, but disappointed the market with a bleak outlook for the next quarter.
Baidu, which has forecast the second quarter revenue to be between $847 million and $867 million, is expecting a tough next quarter. The slowdown in growth of the economy of China is affecting the company with Chinese firms going for budget cuts on advertisements.
The shares of the company fell after it reported the forecast for the next quarter. The shares declined 9.25 percent to 123.26 in after- market trading on NASDAQ.
The profit for the first quarter climbed to $299 million or 85 cents per share up from $170 million or 49 cent per share for the fourth quarter.
With advertisement revenue expected to be affected, it has been offering online games and mobile phone contents as part of its strategy to find new means of revenues. The overhead costs for the quarter climbed to 44 percent with company stating that it will focus on managing operational efficiency to ensure sustainable growth.
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According to China Internet Network Information Center, the country has 513 million internet users, which is the largest in the world. Baidu's market share in search engine business in China has continued to increase with Google disagreeing to obey the censorship of web content.
The company has followed a strategy of supporting internet censorship to gain the favor of the Chinese government, which has a firm hold on information provided in the country.