Its operating profit was $559m in the three months to 30 June, down 2.5% on the same period last year.
The company found its core search engine business less profitable in a more competitive market.
Baidu announced last month that it would be investing more in its e-commerce and electronic wallets.
Research and development costs attributed to its new investments jumped 56.2% in its second quarter to $437m.
The company had a revenue of $2.67bn over its second quarter, which is a 38.5% increase compared with last year.
Baidu's financial officer said: "We continue to invest decisively in the 'Next Baidu'. We are delighted by the progress we have achieved and are confident that these investments will generate long term shareholder value."
China's biggest online search engine Baidu missed analysts' expectations as profits took a hit from investment redirected elsewhere.