Nov 21 (Reuters) - Baidu ( BIDU ) reported a 3% fall in

third-quarter revenue on Thursday, meeting market estimates, as

China's biggest internet search provider grappled with weak

spending on its advertising services in a sluggish economy.

Baidu's ( BIDU ) U.S.-listed shares rose about 1% in premarket

trade.

Baidu ( BIDU ), like tech peers, has diversified into autonomous

driving as well as artificial intelligence, with its Ernie

large-language model powering products such as a ChatGPT-like

chatbot.

Still, online advertising tied to its core search business

accounts for more than half of its revenue.

Advertisers on its platforms include a large number of small

and mid-sized enterprises making Baidu ( BIDU ) highly sensitive to tepid

economic growth and weak consumption, which pressures businesses

to curb advertising spend.

Revenue in Baidu's ( BIDU ) online marketing division fell 4% to 18.8

billion yuan in the quarter versus analysts' 18.89 billion yuan

estimate.

Revenue reached 33.56 billion yuan ($4.64 billion) for

the three months ended Sept. 30. That compared with the 33.43

billion yuan average of 20 analysts' estimates compiled by LSEG.

Net income climbed 14% to 7.63 billion yuan versus a

consensus estimate of 4.67 billion yuan.

Baidu ( BIDU ) has been able to offset some weakness in

advertising revenue thanks to momentum in its non-online

marketing business, largely boosted by its AI Cloud segment.

Last week, Baidu ( BIDU ) unveiled new AI products including smart

glasses and a no-code software development tool.

Baidu ( BIDU ) has also launched a paid version of its chatbot for

public use, while offering Ernie's AI capabilities to developers

through its cloud computing platform.

It has reported its Ernie platform now handles 1.5 billion

daily user queries and interactions versus 200 million in May.

But its mobile chatbot Wenxiaoyan, previously known as Ernie

bot, has been overshadowed by ByteDance's Doubao. Wenxiaoyan

recorded 3.8 million monthly active users in October 2023, data

from consultancy SensorTower showed. Doubao registered 19.4

million.

($1 = 7.2370 Chinese yuan renminbi)