China’s Baidu announced on Monday that its third-quarter revenue was higher than market expectations, and said it would acquire the real-time video streaming business of social media platform JOYY in China for approximately US$3.6 billion (approximately Rs 26.8 billion).
The company said that through this transaction, its purpose is to diversify its revenue sources, most of which come from advertising sales on its core search engine platform.
Baidu CEO Robin Li said in a statement that Baidu’s booming mobile ecosystem has achieved rapid growth in non-advertising revenue by increasing logged-in users and expanding membership, real-time streaming and online games.
The company benefited from the higher subscribers of Baidu’s video streaming service iQIYI and the rebound in advertising expenditures on its core search engine platform during the quarter.
As the Chinese economy gradually got rid of the COVID-19 downturn in the 19th century, during the peak of the pandemic, corporate advertising spending also rebounded from the trough. In September, China’s industrial output value grew faster than expected, and retail sales increased.
The company said that it expects revenue for the quarter to be between 28.6 billion yuan (approximately Rs 32,400 crore) and 31.3 billion yuan (approximately 35,500 crore), compared with an estimated 28.98 billion yuan (approximately 32.9 billion yuan). rupee).
The company said that iQiyi’s subscribers reached 104.8 million in September, and membership revenue increased by 7% year-on-year.
Baidu’s Netflix-like service is under investigation by the U.S. Securities and Exchange Commission (SEC), and the accusation involves short-seller Wolfpack Research inflating the number of users, revenue and the price of paid content.
As of September 30, the company’s total revenue increased by 1% to 28.23 billion yuan (about 32 billion rupees). According to Refinitiv’s IBES data, analysts’ average expected income is 27.45 billion yuan (about 31100 billion rupees).
The company’s U.S.-listed stock initially rose slightly and fell 2% after the market.
© Thomson Reuters 2020
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