Baidu Tumbles as Star Hire Steps Down After Less Than 2 Years
(Bloomberg) -- Baidu Inc.’s Qi Lu, the former Microsoft Corp. executive hired to oversee virtually every aspect of its business, has stepped down from all active management roles less than two years after joining the Chinese internet search leader.
The former group president and chief operating officer becomes the highest-profile executive to exit the company over the past few years. Lu, one of the architects of Microsoft’s artificial intelligence program, resigned to deal with family matters and because he could no longer work in China on a full-time basis, the company said in a statement. He remains vice chairman. Baidu fell as much as 8.2 percent, the most intraday in six months, to $256.68 in U.S. trading.
Lu’s departure is a major blow for Baidu, which spent 2017 selling or spinning off cash-burning businesses such as food delivery unit Waimai to focus on core technologies. The Microsoft veteran was tasked with leading a drive into the AI that underpins everything from its autonomous cars to search and news algorithms. Baidu said it appointed Wang Haifeng senior vice president and the new general manager of the company’s AI Group.
“It’s definitely a blow to Baidu, particularly its efforts to be a leading force in China and the world’s AI industry,” said Mark Natkin, managing director of Beijing-based Marbridge Consulting. Lu “was a key member of Baidu’s leadership and decision-making strata and losing him is a significant setback.”
Baidu, the smallest of a Chinese “BAT” triumvirate that includes Tencent Holdings Ltd. and Alibaba Group Holding Ltd., is coming off a dismal 2017 when government regulations wiped out a chunk of its advertising revenue. Analysts and investors have cited Lu as a key reason behind the company’s revival via areas such as newsfeed advertising. Wang, Baidu’s new AI overseer, joined the company in 2010 and oversaw its core search products.
“To achieve the sort of ambitious plans that Baidu has in the AI space, it really needs at least a couple of strong leaders that the rest of the company can rally around,” Natkin said.
Thomas Chong, an analyst at Credit Suisse, said he thinks Baidu’s strategy “remains unchanged with emphasis on AI. However, we believe visibility is needed about execution of new initiatives post new appointments.” Chong downgraded the stock to neutral.
Lu’s exit follows the resignation of several senior executives, including well-regarded chief scientist Andrew Ng about a year ago. Baidu founder and Chief Executive Officer Robin Li said Friday Lu had laid the foundation for future growth. The departing executive said he intended to work in research and investment after leaving Baidu.
“We have seen many positive changes at Baidu since Qi joined last year,” Li said in the statement. “With Baidu’s strategy to transform into an AI-first company firmly in place, we are well positioned to continue the momentum that we have built in the past year.”
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