Baidu's Spending on Internet Services Weighs on Margins: Chart

Baidu Inc.’s operating margins have headed south as China’s Internet search leader plows money into video content and on-demand services. The company, which reports quarterly results Thursday, is locked in a battle with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. for Internet-based services such as food delivery and streaming video to banking and insurance.
Such investments however -- measured in the billions of dollars -- are increasingly pressuring Baidu’s profitability: spending on Internet services could shave about 30 percentage points off operating margins this year, HSBC analysts estimate.

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