Baidu profits miss expectations

China's biggest online search engine Baidu missed analysts' expectations as profits took a hit from investment redirected elsewhere.

Its operating profit was $559m in the three months to 30 June, down 2.5% on the same period last year.

The company found its core search engine business less profitable in a more competitive market.

Baidu announced last month that it would be investing more in its e-commerce and electronic wallets.

Research and development costs attributed to its new investments jumped 56.2% in its second quarter to $437m.

The company had a revenue of $2.67bn over its second quarter, which is a 38.5% increase compared with last year.

Baidu's financial officer said: "We continue to invest decisively in the 'Next Baidu'. We are delighted by the progress we have achieved and are confident that these investments will generate long term shareholder value."