SINGAPORE (July 1): For years, Chinese search engine giant Baidu, one of the world’s top digital technology companies, was the envy of the Asian corporate world. Because of its resemblance to the global search giant, it has been dubbed the “Google of China”. A year ago, its market capitalisation briefly exceeded US$100 billion. If you had bought the stock at the IPO, from trough to peak you would have made a 110-fold gain. Over the past year or so, Baidu’s fortunes have dipped precipitously. Now the region’s once-shining tech star is struggling to stay relevant.

Unlike other Chinese tech players, Baidu cannot blame the ongoing US-China trade war or President Donald Trump’s tariffs for its woes. It does not export anything to the US nor has it been accused of stealing any technology or intellectual property. It is essentially a Chinese domestic-focused search engine that depends on local advertising. While the spectre of the trade war and new tariff barriers is undoubtedly slowing the Chinese economy and, as a result, ad spending, most of Baidu’s competitors are still growing their share of advertising.

In mid-May, Baidu reported that it lost US$49 million ($66.4 million) in the last quarter, the first time it has been in the red since its 2005 listing on Nasdaq. While its core revenues grew 16%, earnings plunged 66% because of heavy marketing expenses, which nearly doubled in the previous year. Analysts now expect Baidu’s revenues to grow 7.5% this year to US$16.01 billion as earnings plunge 77%. Baidu stock is down nearly 60% from last year’s peak — and down 39% over the past five years — making it the world’s worst-performing large-cap tech stock. The search engine operator is now only the fifth-largest digital tech player in China in terms of market value, behind e-commerce giant Alibaba Group Holding and gaming behemoth Tencent Holdings, No 2 e-commerce player JD.com and food delivery firm Meituan Dianping.

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