Baidu's net profit in the fourth quarter grew 36 percent year-over-year, but the company admits it has to still take advantage of China's growing mobile Internet market.
In the fourth quarter ending Dec. 31, Baidu's net profit reached 2.8 billion yuan (US$445 million), the company reported on Tuesday. Revenue also met company projections and at 6.3 billion yuan increased by 41.6 percent from the same period last year.
Baidu has long dominated China's PC-based search market, and brings in most of its revenues from online advertising customers. In the fourth quarter, the search giant had about 406,000 active online advertisers, a 30.5 percent increase year-over-year.
But the company faces the challenge of bringing its services to China's mobile Internet space. The nation is the world's largest smartphone market, and 420 million people in the country are going online through mobile devices, according to the China Internet Network Information Center.
"This is a huge change, and we are feeling energized by the opportunities before us," said Baidu's CEO Robin Li in a Tuesday earnings call. Baidu's mobile search usage will overtake PC-based search sooner rather than later, he added.
The company is adding new features to its mobile search engine "almost on a weekly, if not on a daily basis," Li said. Baidu also wants to turn its popular mobile map app into a location-based platform that can recommend services to users. In addition, the company has released a Siri-like voice assistant for the Chinese Mandarin language.
Baidu's mobile search business, however, has yet to contribute to meaningful revenues, and only a small number of its online advertising customers have optimized their sites for smartphone and tablet devices. "There is a lot of work ahead of us on this front," Li said. "As we have said before, it will take a couple of years to close this gap."
For this year's first quarter, the company projects its revenue will grow between 38 percent to 42.6 percent year-over-year.