Baidu To Withdraw Some Ad Types

Taxes are increasing for search ads in China

Alibaba and Baidu are expecting a cut in earnings, due to increased taxes on search advertising in China. New rules to regulate paid searches from September were announced last week by China's State Administration for Industry and Commerce. Currently, around 50% of Alibaba's revenue would be affected which would lead to a 2.4% drop in annual earnings, whilst Baidu is expected to see a 4% drop in earnings in 2017. Alibaba has said that the effect the rules would have on their earnings would be small, as its methods of creating revenue are becoming more diverse. Meanwhile, Baidu said that it accepted the changes fully but that they could become “excessively burdensome” and it may have to stop posting certain types of adverts, such as pay-for-performance services. 

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