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Baidu Conference Call Highlights

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Baidu Inc (NASDAQ: BIDU) reported its third quarter earnings on Wednesday. Shares of the company are up 6 percent.

Below are some key highlights from its conference call.

Financial Progress:

• Our focus remains on solidifying our leadership positions in key gateways such as search, maps and app distribution.
• For the third quarter, total revenues were RMB13.5 billion, representing a 52% increase year-over-year.
• During the third quarter, Baidu had approximately 516,000 active online marketing customers, a 11% increase.
• Revenue per online marketing customer for the third quarter was RMB25,900, a 36% increase from the corresponding period in 2013 and an increase of 7% from the previous quarter.
• Traffic acquisition cost as a component of cost of revenue in Q3 was RMB1.7 billion or 12.9% of total revenues.
• The company had cash, cash equivalents and short-term investments of RMB51.3 billion.
• Net operating cash inflow and capital expenditure for the third quarter were RMB4.9 billion and RMB1.4 billion respectively.


• We delivered strong results this quarter.
• The top line continues to be robust, driven by our core search service.
• Mobile contributed 36% of our total revenues for the quarter.
• Our traffic continued to grow healthily, driven largely by mobile, and this quarter mobile traffic surpassed PC traffic.
• As iPads have grown to be a more meaningful portion of our traffic, from this quarter onward, we will classify all tablets as part of mobile to reflect tablets' mobile characteristics.
• If we had classified all tablets as mobile in the second quarter, our mobile revenue would have been 33%.
• Excluding iPad revenue in the second quarter, our mobile revenue was 30%.
• Baidu continues to enjoy clear dominance and onward and upward growth momentum in the key mobile gateways of search, maps and apps distribution.
• Mobile enables us to play a broader role in the larger addressable market.
• O2O is perhaps the most exciting of the many new opportunities that China's mobile Internet revolution has opened up.
• We can help bridge online and offline.
• And with Baidu's solid mobile foundation, we can extend our value proposition to our users and customers in ways we were not able to before.
• For customers, we have the potential to show true conversion from online to offline as well.
• With PCs we were limited to generating leads, but with mobile, we can participate not only in leads generation but also fulfillment in the closed-loop transaction.
• Baidu can help our customers, large, medium and smaller local merchants alike, bring users through the door.
• We can help fill empty seats. We can really match the service with the need.
• We've designed our products to deliver an end-to-end experience from query to payment to service fulfillment.
• With the new opportunities mobile presents, we can now connect not only with roughly 0.5 million large customers.
• Voice search queries already make up around 10% of mobile on Baidu today, and we believe that in the next five years over 50% of searches will be speech or image driven.

Baidu Connect:

• At Baidu World, on September 3, we rolled out a new initiative called Baidu Connect.
• Baidu Connect build upon light apps and is a powerful tool for merchants that can bring in a large scale of fees.
• We provide easy-to-set-up templates tailored to specific industries.
• The Baidu Connect account helps merchants reach new customers and maintain engagement with existing ones.
• Baidu Connect enables both pull through search as a general search or adding the @ symbol before the real name of our service and landing directly on the Baidu Connect page.

Posted-In: conference callEarnings News


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