Baidu shares dive on earnings miss

Sometimes referred to as the Chinese answer to Google, Baidu reported that revenues rose 38 percent from a year earlier, but not enough to meet expectations.

Baidu shares have skidded after the Chinese internet colossus reported earnings shy of most market expectations.

Baidu's profit for the second quarter was 3.66 billion yuan ($591 million), up slightly from 3.55 billion yuan in the same quarter a year earlier. Baidu reported that revenues rose 38 percent from a year earlier, to 16.57 billion yuan.

But the results were below market forecasts, and Baidu shares tumbled 8.69 percent to $180.50 in after-market trading on the Nasdaq following the release of the earnings figures. Baidu had ended the formal trading day down 4.16 percent.

Company executives touted the earnings as showing the company is well positioned in the market, particularly when it comes to staying in tune with people increasingly using smartphones or tablets to access the internet.

"As we continue to connect people with services and enable closed-loop transactions, we are creating a transactional business model as Baidu grows and evolves in the age of mobile," chief executive Robin Li said in a statement.

He maintained that the company's cornerstone search business delivered "solid growth".

Around 629 million people used Baidu mobile search during June, an increase of 24 percent from the same month last year, according to the earnings report.

In addition to its search engine business, Baidu invests in other technology areas including artificial intelligence, and has taken a stake in the global ride-sharing service Uber. Last year, the company confirmed that it is developing a self-driving car, with deputy managing director of Baidu's Institute of Deep Learning, Yu Kai, saying a prototype would be ready this year.

In April, Baidu shut down the Japanese version of its search engine after eight years of failing to make an impact in the market.

"Apparently, the search engine Baidu Japan has never attracted a large number of users," a spokesperson said.

At the same time, the company is looking to expand its presence in Latin America, and is looking at Argentina, Chile, or Mexico to sit alongside its Brazilian operation.

Last month, Baidu apologised after it was caught cheating in an international supercomputer image-recognition test, and has been banned from participating in the event next year.

With AAP