Baidu CEO Li Says Mobile Web Revenue Remains Elusive in China

Baidu Inc. Chief Executive Officer Robin Li said China’s biggest Internet companies haven’t yet figured out the best way to make money from mobile, and he’s patiently experimenting with business models.

About 25 percent of Baidu’s (BIDU) research and development spending is on mobile, even as smartphones make up less than 10 percent of the company’s total sales, Li said yesterday at the China 2.0 conference at Stanford University. Mobile sales at least tripled this year as Baidu rolled out products, he said.

“Exactly when it will become a material source I don’t know,” Li said in his keynote address. “I’m in no hurry to figure that out because we know there’s lots of room for improvement” in mobile advertisements, he said.

Baidu, owner of China’s most-used search engine, introduced a mobile browser earlier this month for devices running Google Inc.’s Android operating system, as part of Li’s effort to become the front door to the Web for smartphone users. Mobile-ad sales in China more than doubled to 2.4 billion yuan ($380 million) last year, according to research company iResearch.

Beijing-based Baidu said in July that it’s offering search on Sina Corp.’s mobile Web portal. That came after it agreed to offer search results of posts by users on Sina Weibo, a microblogging service similar to Twitter Inc. The company has also introduced potential money-making services like cloud storage.

Still, Li said that while he’s optimistic about the future of the mobile Web, the money currently being generated doesn’t yet match the hype.

“It’s very important for us to find the right business model for the mobile Internet,” he said. “We know users love the mobile Internet and we have to go with them and we have to develop things they want.”

Baidu rose 2 percent to $116.89 in New York trading yesterday, leaving it little changed this year.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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