Baidu Inc (ADR) (NASDAQ:BIDU) has denied reports that appeared in a section of the media that its chief executive officer, Robin Li had been slapped with a travel ban. This comes amidst a corruption crackdown which has seen several executives in the Chinese private sector netted. The anti-corruption campaign is being spearheaded by Xi Jinping, the president of China.
Billionaire disappears in Hong Kong
The denial comes after Bowen Press, a news site in Taiwan reported that Li had been forbidden by the authorities from leaving China. Earlier this year in January, Xiao Jianhua, a Chinese billionaire disappeared while in Hong Kong. He is now thought to be holed up somewhere in China.
The denial preceded the Baidu’s earnings report for the fourth quarter of 2016. Following the advertising fiasco in which a student died after responding to an ad on Baidu, the report showed that the decline in sales continued for the second consecutive quarter.
Revenues were $2.65 billion having gone down by 2.6%. This was slightly better than what analysts had projected. The company, however, projected confidence saying that going forward sales and profitability would improve.
“We believe the most significant revenue impact is largely behind us. Revenue in the fourth quarter resets our revenue base and we look forward to 2017 as a time of gradual recovery and growth,” Baidu’s chief financial officer, Jennifer Li, said.
Intense competition in china’s digital advertising sector
Other than the negative publicity that Baidu received following its advertising fiasco, competition has also been intensifying in China posing a threat. This is largely from Alibaba Group Holding Ltd (NYSE:BABA) which is selling advertising space on its online shopping platforms, Taobao and Tmall. At present, Alibaba is the biggest digital advertiser in China with a market share of 26.5%. Baidu’s share of the market is 23.3%.
Another firm that is competing with Baidu for advertising dollars is Tencent Holdings. The group owns the biggest social media platform in china, WeChat. Its share of the market in China’s digital advertising sector is 11.4%.
On Thursday, shares of Baidu Inc fell by 0.74% to close the day at $184.64.