Baidu’s Ad Business Under Fire from Rivals Douyin, Xiaohongshu

Things have been tough lately for Chinese internet pioneer Baidu.

Baidu recently reported its steepest quarterly revenue drop in three years. (Photo: simone.brunozzi Flickr)

Its AI successes of the previous decade have since been overshadowed by a wave of new competitors, and its shares have been sliding since early 2021. Today, the company is valued lower than any profitable firm on the Hang Seng Tech Index, Andrew Nusca reported for Fortune Tech.

Baidu is spending aggressively to catch up in cloud computing, self-driving cars, and—of course—AI, led by its Ernie family of models.

But its core search advertising business is under siege from rivals Douyin and Xiaohongshu. On Thursday, the company reported its steepest quarterly revenue drop in three years.

The old saying goes: building the plane while flying it. For Baidu, it may be more like “rebuilding the plane while putting out an engine fire.” Can it stage a cinematic comeback? For now, investors’ response seems to be: surely you can’t be serious.