Coronavirus is expected to affect more than just lives, as the outbreak has resulted in companies expecting an unprecedented slowdown in business. The latest of these is Baidu, an Internet Search Provider(ISP) that is practically the Google of China. The company outperformed expected revenues in Q4 of 2019, but anticipates a nose-dive of sorts for the first quarter leading up to 2020 due to the deadly coronavirus.
The company expects a revenue between 21 billion yuan ($3 billion) and 22.9 billion yuan in the March quarter, missing the earlier mark of 23.4 billion yuan by 5% to 13%. The company has also been suffering from the economic slowdown of its homeland, which was also pointed out Alibaba issued a similar statement a few days back. Apart from these factors, competition is also heating up for the company as more and more companies are getting into the field of advertising, including TikTok’s parent company ByteDance.
Despite that, the Chief Executive Officer Robin Li has found a silver lining in all of this, as he expects revenues for platforms that provide online entertainment and education to only increase. Thus, Baidu’s iQiyi Inc. projected a better-than-expected revenue gain of 2% to 8% this quarter as the Netflix like service will garner more response as daily activities remain at a halt.
“The return of economic growth will be a long-term issue after the epidemic, but many new opportunities are emerging,” the billionaire founder said in a personal memo to BloomBerg news.
The platform showed a better performance than expected in the last quarter of 2019, but coronavirus has hit all companies alike. Perhaps the company that can relate the most to Baidu is Alibaba, as both companies have their base of operations at the epicentre of the epidemic. After having a phenomenal last quarter in 2019, ending up with a revenue of 161.46 billion yuan, the company is expecting a slowdown in this quarter.
This slowdown for the Chinese economy came at the worst time possible, as it was at the verge of a deal with the U.S. government which could have effectively ended the U.S.-Sino trade war. The future of the two countries lies at the mercy of the coronavirus.