$Baidu(BIDU)$ earnings release

$Baidu(BIDU)$ earnings release basically is just the same as previous quarter except, now market realized the new AI business is not as profitable as it's legacy search ads business. Base on Tencents recent inputs, it's a 30% margin business whereas legacy ads is easily double this figure. In addition, it'll continue to swallow S&M & Capex $$ putting it's book under tremendous strain. At this point, the book still looks alright but if it wants to stay in business, they'll have to spend more. In usual scenario, market should price it at a higher discount, however, in China, it's a different case. BIDU survival will hinge on its relations within the countries government. So far, it seems like gov is still behind them as it has always been. This just how poor they execute plans.

Key takeaway : Adopting western monopoly work ethics & culture in a competitive market is suicide. Something I hope $Baba$ could learn from.

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