Baidu Trims Sales Outlook for the Second Quarter, Shares Slip
Shares of Baidu dropped five percent during the after-hours trading to $154.99 following the cuts in the company's second-quarter revenue estimates.
Baidu Inc, Chinas Internet giant now expects its second quarter revenue to be in a range of 18.1 to 18.2 billion yuan. Earlier the company expected it to be in a range of 20.11 to 20.58 billion yuan.
Earlier the Chinese government ordered Baidu to overhaul its search practices after a college student suffering from cancer died after taking bogus therapy which he found via Baidu's search engine. Now, Baidu requires abstaining from offering online market services to medical organizations which do not meet strict qualifications. In addition, the company also requires limiting the fraction of marketing information to thirty percent or less on every web page and four advertisement in one page.
The company has started taking measures from the starting of May 2016 to modify paid search services. It has taken steps to apply measures that have been requested by the regulatory authorities.
Baidu also has introduced several other measures to make user experience better and build a more safe and trustworthy platform. These measures seem to be working as the traffic inflow has increased over time.