Baidu stock has had a rough couple of days. Following their lower-than-expected earnings the company has suffered numerous downgrades from sell-side analysts as their stock dropped 6% in late trading on Monday. The company’s second quarter earnings grew 3.3%, but aggressive investment in offline services saw them cut into their profits.

CFO Xinzhe Li confirmed that spending, general and administration expenses were forecast to rise to between 80% and 90% YoY – up from initial predictions of 50%. Such expenses include marketing and promotion for their spate of recent O2O investments.

Li pointed to market conditions where non-public companies were creating fierce competition, leading Baidu to “basically double down” on investment in O2O in order to secure themselves within the market. Currently O2O penetration is still lingering at “low single digits” in terms of percentage.

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Cate Cadell

Cate is a tech writer. She worked as a journalist in Australia, Mongolia and Myanmar. You can reach her (in Chinese or English) at: @catecadell or catecadell@technode.com