Baidu, the company behind the eponymous Chinese online search engine, reported the biggest drop in profit for а quarter and the weakest revenue growth of nearly eight years. This happens as a result of the scandal the company gоt involved in, earlier this year, reported Reuters.
Public anger overtook Baidu after a student suffering from severe cancer, accused the company of leading him to ineffective treatments on the web. Regulators responded to this by imposing limits on medical ads served by the company, prompting Baidu to lower their revenue forecast in the second quarter.
The company said it expects its revenue for the next reporting period to be in the range from 18.04 to 18.56 billion yuan (2.71 to 2.79 billion dollars).
Last week, regulators said they are investigating Baidu again, this time in connection with the rumors that illegal gambling sites have used the search engine to promote themselves. Additional penalties for this could jeopardize further the prospects of the company.
Baidu’s net profit fell to 2.41 billion yuan (362 mln. dollars) in the April-June quarter from 3.66 billion yuan a year earlier, the company said. The average estimate of analysts was for a net profit of 2.42 billion yuan, according to Thomson Reuters.
Baidu’s revenue jumped by 10.2% to 18.26 billion yuan from 16.58 billion yuan a year earlier, which is their poorest growth of nearly eight years. The average analyst estimate was for 18.18 billion yuan revenue.
The price of the company’s shares dropped by 12.4% from the beginning of the year.