(Reuters) - Chinese search engine leader Baidu Inc booked a 1% rise in quarterly revenue, beating market estimates, and said it will buy streaming platform YY Live from social media firm JOYY Inc for about $3.6 billion to help diversify revenue sources.
Baidu earns the bulk of its revenue from advertising sales on its core search platform. Ad spending hit lows earlier this year during COVID-19 lockdowns but has picked up in tandem with an economy which, in September, saw retail sales gain and industrial output exceed market expectations.
“Our revenue growth turned positive in the third quarter,” said Chief Executive Robin Li in an earnings briefing.
Baidu also benefited from a 7% on-year increase in membership revenue at streaming affiliate iQIYI Inc, where subscriber numbers touched 104.8 million in September.
Netflix Inc equivalent iQIYI is under investigation by the U.S. Securities and Exchange Commission after short-seller Wolfpack Research said the video service inflated user numbers, revenue and the prices it pays for content. iQIYI dismissed Wolfpack’s comments as erroneous and unsubstantiated.
Overall, Baidu’s July-September revenue hit 28.23 billion yuan ($4.29 billion). That compared with the 27.45 billion yuan analyst estimate average, showed IBES data from Refinitiv.
The firm said it expects October-December revenue of 28.6 billion yuan to 31.3 billion yuan, versus analyst estimates of 28.98 billion yuan.
Baidu’s U.S.-listed shares ended Monday trade up 1.9%. Its shares have risen 17% so far this year, compared with an S&P 500 Index increase of 12% over the same period.
Reporting by Ayanti Bera in Bengaluru and Yingzhi Yang in Beijing; Editing by Arun Koyyur and Christopher Cushing
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