Investing.com - Baidu Inc (NASDAQ:BIDU) tumbled more than 5% on Friday, despite posting fourth-quarter earnings (Q4) that beat expectations a day earlier on Thursday, Feb 23.
Baidu reported a 3% year-over-year slump in net revenue to RMB 18.21 billion, compared to the same period a year ago, as changes in regulatory law weighed on top-line performance and costs swelled, after the company made a string of investments to drive growth over the past year.
Last year, the Chinese government revised the country’s advertising laws to address issues of false and misleading advertising, as a result online platforms like Baidu have to go through mandatory regulatory approvals, which has pressured marketing revenues.
Baidu’s costs have swelled over the past several months, as the company has ramped up investment in content, bandwidth and traffic in an effort to support growth in its online video streaming platform iQiyi and transaction services businesses.
Baidu’s transaction services segment, mainly consists of its online to offline (o2o) businesses, aimed at connecting people who are searching online with local merchants.
Artificial Intelligence (AI), was highlighted as another area of interest, after the company recently hired AI expert Qu Lu as its Chief Operating Officer (COO) and plans to begin small-scale production of its driverless cars by 2018.
Baidu shares last traded at $175.80, down 4.8%.