Baidu Inc.'s longtime chief financial officer plans to step down to head the company's investment firm Baidu Capital, the company said Thursday.
Jennifer Li, who has held the CFO post for nine years, will become chief executive of Baidu Capital, the company said Thursday as it reported quarterly results.
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First-quarter profit fell 11% to 1.78 billion yuan ($258.1 million), or 46.29 yuan ($4.63) an ADR. Excluding stock-based compensation and other items, however, profit rose 1.3% to 2.39 billion yuan ($347.2 million). The Chinese search engine giant said revenue rose 7% to 16.89 billion yuan ($2.45 billion) from 15.82 billion yuan a year ago.
Thursday's report was the first quarterly earnings since Baidu brought on Qi Lu, a former senior Microsoft executive as group president and chief operating officer to refocus the company's business. Mr. Lu, a Carnegie Mellon scientist was hired in January to help strengthen the Chinese internet firm's emphasis on artificial intelligence. Baidu's fortunes have lagged behind its bigger rivals Alibaba Group Holding and Tencent Holdings in the past year, as it failed to capitalize on the boom in mobile internet in China. Many of its efforts in payments, food delivery and group-buying coupon face fierce competition, and online advertising, its core earnings stream, took a hit in 2016 after China's regulators introduced stricter laws in the space.
For the current quarter, Baidu forecast revenue of 20.47 billion yuan ($2.97 billion) to 20.98 billion yuan ($3.05 billion), roughly in line with analysts' projected $3.03 billion, according to FactSet.
"While our investment in AI is a long-term proposition, we are already seeing the powerful benefits of AI bear fruit across our existing platform," chief executive and founder Robin Li said in a news release.
Overall company content costs nearly doubled to 2.64 billion yuan ($382.9 million), largely tied to online video armiQiyi. Meanwhile, research and development costs rose about 35% to 2.83 billion yuan ($411.8 million).
In February, Baidu raised $1.53 billion from private-equity investors to expand iQiyi, which recently signed a licensing deal with Netflix, the maker of shows such as House of Cards, expanding its suite of partners such as Paramount Pictures, 21st Century Fox Inc.
Since his appointment, Mr. Lu has shaken up strategies in Baidu's artificial intelligence units. He took the unprecedented move of open-sourcing Baidu's self-driving car technology to companies. Baidu also said it would double the size of its AI lab in Silicon Valley and has started recruitment drives in overseas campuses such as Stanford and Carnegie Mellon University to attract talent.
Still, his arrival hasn't been without disruption. A string of key Baidu executives have left their post since January. The highest profile departure, Baidu's former chief scientist and Stanford University professor Andrew Ng, said in March he would leave the company to explore a new chapter in his artificial-intelligence work.
Connie Gu, an analyst at BoCom International said Baidu's new focus on artificial intelligence is a positive thing, as the Beijing-based company is the strongest player in the space among China's largest technology companies. Ms. Gu said investors are watching to see if this push into artificial intelligence will allow Baidu to raise its search engine quality and revenue.
"The upside to this is that now the search and AI units can cooperate better together and there will be more data sharing," Ms. Gu said.
Write to Maria Armental at email@example.com and Liza Lin at Liza.Lin@wsj.com
(END) Dow Jones Newswires
April 27, 2017 17:53 ET (21:53 GMT)