Medical advertising has been hit hard: "Weize Xixi incident" cut Baidu's second-quarter earnings forecast by 10%

According to Reuters and other media reports, on Monday, China's web search service provider Baidu announced that it lowered its second-quarter performance expectations. As a result, Baidu's share price plummeted 8% in the US stock market after the trading hours.

Baidu said that due to regulatory investigation, and some of the health care industry Baidu advertisers have cut or suspended advertising spending, which will affect the current second quarter advertising revenue.

Baidu also said that the company's move to reduce the advertising links on the search results page will also affect revenue.

For the second quarter, Baidu’s previous revenue forecast was $3.12 billion to $3.19 billion. Baidu’s revenue forecast on Monday was lowered to $2.81 billion to $2.82 billion.

Tencent Technology estimates that Baidu lowered the expected value of the second quarter revenue, about 10%.

Last month, China’s “Wei Zexi incident” occurred. University student Wei Zexi received experimental cancer treatment, but unfortunately passed away. His death was considered to be related to the promotion of hospital advertisements.

Afterwards, the relevant Chinese government regulatory authorities began to impose restrictions on Baidu's search advertising.

Baidu cut its second-quarter revenue by 10% due to medical advertising

According to Reuters, on Monday, during the after-hours trading session, Baidu's share price plummeted 8% and its share price was at $150.5.

Baidu is still the largest web search company in China, and its revenue increased by 30% in the first quarter of this year. Like Google (microblogging), search advertising is still Baidu's most important source of income.

It should be pointed out that after the Wei Zexi incident, Baidu reduced the number of search advertising spaces, but the unit price of search advertising has increased several times, so the search advertising revenue will not fall avalanche.

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