Baidu reports continued growth slowdown

Baidu Inc, China's biggest search engine, has recorded slowed net income growth for the ninth consecutive quarter, which it blamed on continued heavy investment in research and development as it continues to grow its share of China's mobile Internet market.

However, some analysts said they expected the declining profit growth could continue for up to two years, as the company strives to translate its mobile traffic into revenues.

Baidu reported total revenues of 5.97 billion yuan ($961.0 million) in the first quarter, a 40 percent increase on the same period last year, which delivered net income of 2.04 billion yuan, a 8.5 percent rise.

Most of the revenue came from search advertising, it said.

The company's net income growth rate peaking at 171.3 percent in the fourth quarter of 2010, but has been declining since.

Jennifer Li, Baidu's chief financial officer, said the company will spend heavily in infrastructure and marketing this year as she detailed that research and development spending grew 82.9 percent to 810.7 million yuan in the first quarter, mainly due a sharp rise in staff.

Li said Baidu's mobile search traffic has passed 100 million daily active users, a 25 percent increase from the previous quarter.