News from Sina Technology on the morning of August 20,Baidu(Nasdaq: BIDU) After the release of the second quarter earnings report,Baidu Chairman and CEO Li YanhongAn internal letter was issued stating,During this period, in the face of serious external challenges and a weak macro environment, the company promoted a series of disruptive changes from top to bottom, involving organizational structure, personnel changes, business consolidation, etc. These changes have brought phased pain, and will have a positive and far-reaching impact, making Baidu more stable and far-reaching.
Li Yanhong said in an internal letter that judging from today's financial report, some good signs are showing, and the company's performance is steadily picking up. This also proves that Baidu still has a strong position and full of motivation in its core business areas.
Li Yanhong said,Search is the foundation of Baidu and Baidu's core value. Intelligent search has broken through the “box” restrictions, extended from mobile phones to scenarios such as smart speakers and smart cars, and will become a ubiquitous entry point for super intelligent interaction. We must always be committed to doing the best search.
The internal letter stated,“Consolidate the mobile foundation to win the AI era” is our core strategy. We have a far-reaching opportunity to get Baidu back to the top of the industry. We have plenty of grain and grass. We have built some important bridgeheads in key positions. We need more generals who dare to stand military warrants and more soldiers who dare to fight hard.
”As Baidu is about to celebrate its 20th birthday, before 'using technology to make the complicated world simpler', I believe we can also make Baidu a simple, dream-driven company, just like it was when it was founded 20 years ago.” Li Yanhong finally said.
Earlier today, Baidu released unaudited financial results for the second quarter of fiscal year 2019 ending June 30. According to the report, Baidu's total revenue for the second quarter was RMB 26.3 billion (US$3.84 billion), up 1% year on year. Excluding the impact of announced divestment transactions, the year-on-year increase was 6%, compared to the previous quarter, and net profit attributable to Baidu was RMB 2.4 billion (approximately US$351 million), down 62% year on year.
According to data compiled by Yahoo Finance, the average of 16 Wall Street analysts predicted that Baidu's earnings per share for the second quarter would reach 0.87 US dollars according to the US General Accounting Standards (GAAP). According to financial reports, the diluted earnings per share of American Depositary Receipts attributable to Baidu in the second quarter were RMB 7 (about $0.96), exceeding analysts' expectations.
Furthermore, 17 Wall Street analysts expect Baidu's second-quarter revenue to reach $3.66 billion. Financial reports show that Baidu's total revenue for the second quarter was RMB 26.3 billion (approximately US$3.84 billion), exceeding analysts' expectations.
The following is the full text of Li Yanhong's internal letter:
Dear Baidu students:
Early this morning, Beijing time, the company released its financial report for the second quarter of this year: achieving total revenue of RMB 26.3 billion and net profit of RMB 2.4 billion. Judging from today's financial report, there are some good signs that the company's performance is steadily picking up. This also proves that Baidu still has a strong position and full of motivation in its core business areas.
During this period, in the face of serious external challenges and a weak macro environment, the company promoted a series of disruptive changes from top to bottom, involving organizational structure, personnel changes, business consolidation, etc. These changes have brought phased pain, and will have a positive and far-reaching impact, making Baidu more stable and far-reaching.
Search is the foundation of Baidu and Baidu's core value. Over the past 20 years, Baidu Search has focused on meeting users' needs for equal and convenient access to information. Attention to users and continuous investment in core technology have built up barriers to our competition and maintained Baidu's leading position in search. Today, we're redefining search with AI. Because the evolutionary history of search engines is the evolutionary history of artificial intelligence technology. Intelligent search is evolving in the direction of more precise answers, or even unique answers. Currently, Baidu's first search result satisfaction rate has reached 51%. Intelligent search has broken through the “box” restrictions, extended from mobile phones to scenarios such as smart speakers and smart cars, and will become a ubiquitous entry point for super intelligent interaction. We must always be committed to doing the best search.
Based on a solid search foundation, Baidu is building an unprecedentedly prosperous mobile ecosystem. In June, the average number of daily active users of the Baidu App reached 188 million, an increase of 27% over the previous year. The dual engine composed of “search+information flow” and the dual ecosystem of “Baijia+Mini Program” have further consolidated the position of the Baidu App as a super portal, and prompted the Baidu App to achieve strong growth in user time and search traffic. Smart applets help us build a new ecosystem of content and services. On the one hand, Baidu Search's unique features such as centralized distribution and long-tail distribution can help developers obtain traffic and allow the smart applet ecosystem to grow rapidly; on the other hand, rich smart applet products are also an important gripper for improving the search experience, greatly enhancing the ability to search and connect information and services. Thanks to the healthy interaction between search and smart applets, the number of monthly active users of smart applets reached 270 million, and the number of resident applets reached 150,000, covering 271 subcategories.
In the field of AI, we laid it out ahead of time and continued to invest in it for many years. At a time when the wave of industrial intelligence is approaching, Baidu is in the best position ever. Baidu Smart Cloud has developed rapidly with the “Cloud+AI” strategy. In the China Public Cloud Report for the first quarter of 2019 published by Canalys and Synergy Research, Baidu Intelligent Cloud ranked among the top four PAAS (Platform as a Service) and IAAS (Infrastructure as a Service) public cloud service providers in China. This is due to Baidu's long-term first-mover advantage in basic AI capabilities and the industry restructuring opportunities that AI brings to cloud services. As the world's largest open platform for autonomous driving, Apollo continues to solidify and strengthen its leading position in the industry. At the beginning of August, the first mass-produced L4 class autonomous taxi in China, Robotaxi, built jointly by Baidu and FAW Hongqi, has begun large-scale testing in Changsha. Xiaodu Assistant continued to maintain a strong momentum this quarter. The cumulative number of activated devices exceeded 400 million, an increase of 4.5 times over the previous year; monthly voice queries exceeded 3.6 billion, an increase of 7.5 times over the previous year. In different scenarios such as mobile, home, and automobile, it provides users with ubiquitous intelligent interactive services. The Xiaodu smart speaker ranked first in the Chinese market for two consecutive quarters, andAmazons,GoogleTogether, they ranked in the top three global markets.
“Consolidate the mobile foundation to win the AI era” is our core strategy. We have a far-reaching opportunity to get Baidu back to the top of the industry. We have plenty of grain and grass. We have built some important bridgeheads in key positions. We need more generals who dare to stand military warrants and more soldiers who dare to fight hard. As Baidu is about to celebrate its 20th birthday, before “using technology to make the complex world simpler,” I believe we can also make Baidu a simple, dream-driven company, just like it was when it was founded 20 years ago.
Robin