Baidu's Finance Chief to Lead Investment Firm Baidu Capital -- Update

The chief financial officer of Chinese search engine Baidu Inc., Jennifer Li, is stepping aside for a new job at the company, the latest in a series of high-level personnel changes as Baidu seeks to catch up with rivals Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in the fast-changing internet economy.

In recent weeks, Baidu has lost chief scientist Andrew Ng in what analysts considered a setback to its efforts to use artificial intelligence to develop new business ventures. Wang Jin, who led Baidu's driverless-car division, also left the company shortly after Mr. Ng's departure.

The management changes follow January's decision by company founder and Chief Executive Robin Li to bring in former Microsoft executive Qi Lu as president, with responsibility for day-to-day management.

Ms. Li's departure was announced as Baidu reported its earnings after the market close in New York Thursday, where its shares closed up $1.19 to $187.86.

In after-hours trading, shares were down 3.75% after Baidu said net income fell 11% to 1.78 billion yuan ($258.1 million). The company reported revenue of 16.89 billion yuan, a 6.8% increase from the same period in 2016, but its revenue forecast for the current quarter came in below estimates.

Baidu also said content costs nearly doubled to 2.64 billion yuan, largely tied to online-video arm iQiyi. Meanwhile, research and development costs rose about 35% to 2.83 billion yuan.

Ms. Li will serve as chief executive of Baidu Capital, the investment arm launched last fall. At the time, Baidu said the unit would manage a fund of about $3 billion and focus on late-stage technology deals of about $50 million to $100 million.

Before joining Baidu in 2008, Ms. Li worked for nearly 15 years at General Motors Co. In the earnings call, Mr. Li said that experience would be an asset at Baidu Capital.

The new role is a diminished one for Ms. Li, who has seen her portfolio shrink over the past year as responsibilities for marketing and international media relations have been assigned to other executives, according to people familiar with the situation.

Ms. Li couldn't immediately be reached for comment.

With Ms. Li leaving the CFO position, there will be no women on Baidu's senior management team or its five-member board. However Mr. Li's spouse, Ma Dongmin, has rejoined the company as a special assistant to Mr. Li.

Baidu became China's dominant search engine after Alphabet Inc.'s Google left the country to avoid censorship in 2010. Critics say it was slow to embrace the mobile internet as Alibaba and Tencent grew to dominate not only their core businesses of e-commerce and social media respectively, but also areas such as mobile payments and online personal finance.

Baidu's core business, online advertising, took a hit in 2016 after China's regulators introduced stricter laws after the company was embroiled in a series of scandals of misleading medical ads.

Since his appointment as president, Mr. Lu has shaken up strategies in Baidu's artificial-intelligence units, including open-sourcing Baidu's self-driving car technology. In Friday's earnings call, he said the firm is seeking to improve online-advertising revenues through a news-search product and will spend less on its lifestyle-services platform Nuomi, which has faced intense competition in the past year.

Baidu is also accelerating efforts to commercialize its voice-recognition and autonomous-car units, Mr. Lu said. It is also expanding its search traffic by introducing voice search and image search.

"Our focus is tapping into the current trend of user traffic growth," he said. "As we digitize more and more information, overall search demand will increase."

Baidu's core search revenues could gradually improve, but there are still uncertainties remaining about when the company will be able to monetize its AI investments, said John Choi, an analyst at Daiwa Securities Co.

Maria Armental in New York contributed to this article.

Write to Maria Armental at and Liza Lin at

(END) Dow Jones Newswires

April 28, 2017 01:46 ET (05:46 GMT)