* Shares drop over 6 pct in extended trading
* CFO Jennifer Li to step aside for new role as Baidu
* Baidu to stop reporting transaction services metrics
(Adds details from call, context)
BEIJING, April 28 Baidu Inc on Friday
forecast second-quarter revenue largely below estimates as the
Chinese internet company continues to grapple with Beijing's
restrictions on its lucrative medical advertisements segment,
sending its shares down six percent in extended trading.
Baidu forecast second-quarter revenue between 20.47 billion
and 20.98 billion yuan ($2.97 billion-$3.04 billion), largely
below analysts' estimate of 20.84 billion yuan.
Baidu started restructuring its business last year after
Beijing rolled out new requirements for medical advertisers,
denting the firm's lucrative healthcare advertising business
which accounted for about 20-30 percent of its total search
Net income attributable to Baidu fell to 1.78 billion yuan
in the quarter ended March 31, a 10.4 percent drop from 1.99
billion yuan a year earlier, the company said.
Detailing the company's ongoing plans to strip or
consolidate loss-making ventures and refocus resources, the
management said in an earnings call on Friday that it will focus
on artificial intelligence.
"Our focus is two-fold: to enhance and expand our existing
core platform and to lead the commercialization of AI
technology," Baidu COO Lu Qi said on the call.
The company will fold its transaction services, including
maps, delivery and financial services, into core search
business, and will no longer report those metrics separately.
Baidu's chief financial officer Jennifer Li will step aside
and take over as the chief executive of Baidu Capital, the
company's 20 billion yuan ($2.90 billion) investment fund
established last year.
The fund, which will focus on mid-to-late stage deals, is a
core vehicle in the firm's effort to kick-start its new
Baidu will continue to scale back spending on group-buying
platform Nuomi, moving from a transaction-based model to an
advertising model, Li said.
Baidu pledged to invest 3.2 billion in Nuomi in 2015, but
the embattled business has been buffeted by competitors. Last
month, the head of the loss-making unit was fired over
All incremental research and development costs this year
will go towards artificial intelligence with a focus on
personnel, Li added.
Baidu's first-quarter revenue rose to 16.9 billion yuan
($2.45 billion) from 15.82 billion yuan a year earlier,
marginally above the 6.4 percent growth that 13 analysts
surveyed by Thomson Reuters had expected.
Baidu in February forecast first-quarter revenue of 16.48
billion-17.03 billion yuan.
($1 = 6.8958 Chinese yuan renminbi)
(Reporting by Aishwarya Venugopal in Bengaluru and Cate Cadell
in Beijing; Editing by Martina D'Couto and Vyas Mohan)