Question-and-Answer Session
Operator
(Operator Instructions)
Your first question comes from the line of Jason Brueschke. Please proceed, sir.
Jason Brueschke - Citigroup
Thank you. First of all, good morning, Robin and Shawn, and congratulations on your quarter and especially on the outlook. It looks very, very strong. My first question, and I will get back at the end of the queue, is the transition period seems to have come to an end, and that is something that you guys have said would happen going into Q2. Could you just give us some color on really what has changed? I guess what I am interested in is have we seen a decrease in customer churn in Q1, and I guess your expectations for Q2 as well? Have we seen customers that maybe have stopped coming and advertising on Baidu because of the changes in the algorithm, relevancy and dynamic bidding? Have they been coming back?
And could you maybe comment on why the ARPU seems to be growing very well. Is that now the latent effect of these changes to the algorithm or was there something else going on in the market? Thanks.
Robin Li
Jason, as we mentioned earlier, we went through about two quarters of transition and that was actually initiated by some of the algorithmic changes we made in our paid search platform. That change caused some customer confusion and we tried to solve that problem by improving our customer service team, our sales team. Now what we are seeing is that more and more customers, including the new customers we signed up during the past couple of quarters, and many of the existing customers can appreciate our effort. When they look around and try to compare the performance of Baidu platform and the other alternatives, they found that Baidu is still the most effective way for them to promote their products and services. That is why we are seeing the results are getting better and better.
Regarding the increase in ARPU, I would say it is driven by a number of factors, including the traffic growth we experienced during the quarter. We expect the traffic growth will continue for the rest of the year and also, better customer service, better sales team and better execution in other operations metrics.
Operator
Your next question comes from the line of Robert Peck with Bear Stearns. Please proceed, sir.
Robert Peck - Bear Stearns
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