Baidu, China’s leading search engine and internet giant, has set its second quarter revenue forecast at 18.1 to 18.2 billion yuan ($2.81 to $2.82 billion), following a rosier outlook earlier of somewhere between 20.11 and 20.58 billion yuan. The company attributed the cut to a lowered revenue from advertising as well as changes to advertising rules following tighter regulatory scrutiny.
Accounting for a significant portion of Baidu’s revenue, advertising dramatically decreased following the death of a 21-year-old college student who received an experimental cancer treatment which he found on a sponsored Baidu link, prompting both the company and the country’s authorities to pull in the reigns of sponsored medical advertising.
Typically, higher paid links are ranked higher, and are placed in more prominent locations on the site. Amid criticisms alleging that paid links could be misleading and mislabeled, Baidu said on Monday that it has revamped parts of its paid search businesses among other areas to enhance user experience.
The company’s shares dropped 6% to $154 after the market closed on Monday.