Shares of the U.S.-listed company fell 7.8 percent to $198 in extended trading on Wednesday.
Baidu, sometimes referred to as China's Google, reported revenue of 14.05 billion CNY, or $2.26 billion, for the fourth quarter, falling short of the average analyst estimate of 14.12 billion CNY, according to Thomson Reuters I/B/E/S.
Mobile revenue represented 42 percent of total revenue, up from 36 percent in the third quarter, Baidu said.
"In December, for the first time search revenue from mobile surpassed PC," Chief Executive Robin Li said in a statement.
Baidu forecast revenue of 12.65 billion-13.07 billion CNY ($2.04 billion-$2.12 billion) for the current quarter. Analysts on average expected revenue of 13.62 billion CNY.
The forecast reflects the combined impact of the late timing of Chinese New Year and increased contribution from mobile as a percentage of overall revenue, the company said.
Baidu is facing increased competition on smartphones as companies such as Alibaba Group Holding Ltd and Tencent Holdings Ltd invest in apps and content to keep users engaged.
Others, including Qihoo 360 Technology Co Ltd and Sohu.com Inc's Sogou, are moving aggressively into the search business.
"The investments we've made in mobile over the last two years have clearly paid off and set the stage for Baidu to capture an even larger market opportunity," Chief Financial Officer Jennifer Li said in a statement.
Net income attributable to Baidu jumped 16 percent to 3.23 billion CNY, or $520.4 million, for the fourth quarter.
Excluding share-based compensation expenses, Baidu earned 9.97 CNY per share, or $1.61 per ADS, beating the average analyst estimate of 9.94 CNY per share, according Thomson Reuters I/B/E/S.
Baidu shares closed at $214.67 on the Nasdaq on Wednesday.
© Thomson Reuters 2015
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