Internet giant Baidu outstripped quarterly revenue and profit estimates on the back of its cloud business, but warned that the current regulatory crackdown in China, alongside impacts from the pandemic, will hinder advertising sales over the next few quarters, reports Reuters. Beijing’s crackdown has forced some of China’s biggest companies such as Alibaba and Tencent to adapt what were previously considered regular market practices. The crackdown has also dented advertising spending.
“Our ad spend has been impacted by sectors like education, real estate and home furnishing, travel and franchising as we expect this headwind to continue in the near term,” said Baidu’s Chief Executive Robin Li on a conference call.
Earlier this month, Tencent Holdings warned the outlook for the advertising sector would remain weak into next year. “The slowing down ad revenue growth was mainly on the macro headwinds, plus some regulation impacts on few verticals,” Connie Gu, analyst at BOCOM International Securities said.