View photosChina Tech Can’t Spend Its Way Out of This MessMore
(Bloomberg Opinion) — Queen Elsa of “Frozen” might have some advice for those Chinese technology giants nostalgic for the fairy-tale days of fast growth and fat profits: “Let it go, let it go.”
Recent earnings reports from Baidu Inc., Alibaba Group Holding Co. and Tencent Holdings Ltd. show what happens when management remains desperate to keep the top line climbing. Spoiler alert: profitability plummets.
China’s biggest tech companies are not only battling a sustained economic slowdown, they’re getting to the natural end of a decades-long expansion – fueled by the theory that if revenue grows, profit will automatically follow.
Baidu is the biggest victim of this folly. The search-engine company was so desperate to juice sales, especially over Lunar