Baidu Inc. (NASDAQ: BIDU) on Friday released its fourth-quarter earning results, topping analysts’s estimates thanks to more revenue coming from mobile advertisement.
The Beijing-based company posts total revenue of 18.7 billion yuan ($2.9 billion) in fourth quarter, up 33 percent from a year earlier, beating the average analyst estimate of 18.5 billion yuan. Excluding net gain recognized in Baidu's exchange of Qunar shares with Ctrip, the company earned 7.61 yuan per ADS.
Mobile users still had robust growth. Active mobile search engine users rose 21 percent to 657 million from a year earlier. Mobile revenue made up 56 percent of the total revenue in the quarter, compared with 42 percent a year earlier.
“On mobile we can be more targeted. We know more about the user, we know the location of the user and we can enable all kinds of user actions," Chairman Robin Li told analysts on an earnings call. “The nature of the queries on mobile is more toward local services, which inherently have more commercial value.”
The company expects that first quarter revenues will be between 15.4 billion yuan and 16 billion yuan, a little lower than estimates of 16.3 billion yuan. Baidu is spending more money in competing with its rival Tencent and Alibaba. According to Bloomberg, Tencent, Alibaba and Baidu are now vying for supremacy in an on-demand services industry primed for growth as more people turn to their smartphones or the Web to order food, schedule beauty treatments or hire helpers.
“In 2016, we also expect a step-up investment in content cost, but at a slightly more moderate pace than 2015," Chief Financial Officer Jennifer Li said.
Baidu’s American depositary receipts rose 9.78 percent to $173.69 at 12:25 p.m. in New York.