Baidu's Business Model and its Evolution

Case Code: BSTR512 Case Length: 19 Pages Period: 2000-2017 Pub Date: 2017 Teaching Note: Available

Price: Rs.700 Organization: Baidu, Inc. Industry: Search, E-commerce Countries: China Themes: Business Model Innovation, International Management, Globalization Strategy

Abstract Case Intro 1 Case Intro 2 Excerpts

Introduction

In the second quarter of 2016 ended July, Baidu, Inc. (Baidu), the leading Chinese language Internet search engine, reported a 34% fall in its quarterly net income — its biggest quarterly decline since going public in August 2005. The company’s net income fell to RMB 2.41 billion (US$362 million) in the quarter from RMB 3.66 billion a year earlier. The poor performance of the company was attributed to curbs on online advertising in China following the death of a 21-year-old Chinese student in April 2016 who had tried an experimental cancer therapy advertised on Baidu’s website. “The challenges Baidu faced in the second quarter served as a healthy reminder to stay focused on the key drivers of growth, sustainability and leadership: delivering the best user experience and staying at the forefront of technology. The implementation of new regulations and the stricter standards that we proactively imposed to make our platform more robust will likely suppress revenue for the next two to three quarters. This period of uncertainty will pass,” said Robin Li Yanhong (Li), Chairman and CEO of Baidu.....

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