Wei Zexi incident on the impact of Baidu results 3 months loss of 2 billion

Posted On Mar 4 2017 by

from WeChat, the public company confidential Author: Liu Xia

Baidu Inc in June 13th in the SEC announcement down the current quarterly revenue forecast, said regulators for the health care industry and related advertising review, is affecting the company’s advertising revenue. Thus clear the Wei Zexi incident will affect Baidu’s second quarter 2016 results.

a lot of medical customers to reduce investment


announcement shows that Baidu second quarter revenue forecast from 201.10-205.80 billion (31.2-31.9 billion) down to 181-182 billion (28.1-28.2 billion), down the income of about 2 billion yuan ($300 million), has been close to 10%.

reporter query Baidu earnings, the second quarter of 2015, the third quarter, the fourth quarter and the first quarter of 2016, Baidu quarter revenues were 16 billion 575 million yuan (about 2 billion 673 million dollars) and 18 billion 383 million yuan (about 2 billion 892 million dollars), 18 billion 699 million yuan ($2 billion 887 million) and 15 billion 821 million yuan ($2 billion 454 million).

Baidu explained that regulators continue to review the medical, pharmaceutical, health and other similar business online marketing, and medical institutions to implement a more stringent advertising regulations. "Although the review is in progress, the company has observed a significant portion of the important medical clients in the reduction or postponement of investment. These customers may be in the process of adjusting and rectifying their practices to comply with the new requirements."

followed by Baidu to reduce the number of paid links on its platform, in the short term also drag the company’s performance. However, with the adjustment of the practice of medical customers to comply with the new norms, is expected to come from high-quality medical customers’ business will gradually pick up.

announcement that the above approach will help to improve the user experience, enhance Baidu’s market position and long-term benefit.

May 9, 2016, the national network information office announced the search for Baidu in the Wei Zexi incident, the findings of the investigation, requiring Baidu Inc to change the competitive ranking mechanism. Including a comprehensive review of medical business promotion activities, changes in the past to price based sorting mechanism, control the number of business promotion, etc..

in accordance with the requirements for rectification, May 17th, Baidu promotion logo to replace the "commercial promotion" and set the buoy outstanding risk alerts; more than a week after the test scheme and algorithm, since May 23rd, Baidu search results page business promotion information number proportion is lower than 30%".

in revenue after the release of early warning, Baidu shares fell 5.2% in after hours trading Monday.

more than and 40 days to reduce the market value of 74 billion yuan

in the rectification requirements after the announcement, "the business promotion information page number of the proportion of not more than 30%" a, is the industry that Baidu for the future.

Last Updated on: March 4th, 2017 at 12:37 am, by

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