Chinas Struggling Economy Didnt Phase Baidu

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What's going on?

Chinese internet giant Baidu reported better-than-expected quarterly results on Tuesday.

What does this mean?

Baidu the company behind Chinas biggest search engine usually makes a lot of its money from digital marketing, but Chinas struggling economy is hardly encouraging businesses to splash the cash. Baidus online marketing sales fell 12% last quarter from the year before as a result, a trend also clear in rival Tencents results earlier this month.

So Baidu will be feeling extra grateful for its cloud business, which grew its revenue by 31% from the same time last year on the back of steadily rising demand for internet applications. So sure, Baidus overall revenue dropped for the first time in two years, but the 5% dip was still better than analysts feared. Then sprinkle in some increased profit margins here here being Baidus Netflix-esque video service iQiyi with some cost cuts there, and Baidus profit came in a whopping 63% higher than expected.

Why should I care?

The bigger picture: No more awkward cab chats.
Baidu’s newer ventures could help it further offset that sluggish core advertising business in the future. The internet giants doubling down on self-driving technology, for one, having invested heavily into the sector over the past five years. Its been a good ride so far: Baidus Apollo Go driverless robotaxis completed nearly 300,000 rides last quarter, and it secured a permit this month thatll let it operate without on-board safety supervisors for the first time ever in China (tweet this).

Zooming out: Buffetts driving change.
Warren Buffetts going driver-free too, with Pilot Co. the Berkshire Hathaway-owned truck stop operator agreeing to take a stake in driverless truck startup Kodiak Robotics last week. That could be a savvy move: the existing pool of truck drivers is shrinking and aging, so driverless solutions could help alleviate that shortage, bring down costs, and even improve safety too.

Originally posted as part of the Finimize daily email.

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