What happened Shares of Baidu (NASDAQ: BIDU) sank 20.3% in 2019, according to data from S&P Global Market Intelligence . Despite a year of strong gains for the broader Chinese market, the search leader's stock slumped because of weak performance for its advertising business. GXC data by YCharts The stock's biggest drop of the year occurred in May, after the company reported miserable first-quarter results and an uninspiring outlook. The potential impact of the trade war between China and the U.S. was already making shareholders nervous before the release, and the results confirmed that Baidu's advertising business was seeing deteriorating performance and prompted investors to lower their expectations for the stock. Image source: Getty Images. So what Baidu's advertising business faced multiple headwinds last year. With trade tensions pointing to the possibility that economic growth in China could remain sluggish, businesses were less interested in spending money on marketing. Baidu also took measures to remove ad partners from its platform and increase its overall standards to reduce the possibility of intervention from the Chinese government. The stock did see some recovery in November after the company reported third-quarter results that showed better than expected earnings results and solid sales and membership growth for its streaming video spin off, iQiyi. Shares continued to trend higher through the end of the year but still dramatically underperformed the overall Chinese market. Now what Baidu stock has posted significant recovery early in 2019's trading. Shares are up roughly 14.1% in January's trading so far. BIDU data by YCharts Baidu is facing increasing competition, but it retains a leadership position in the Chinese search-and-advertising market. With signs that progress is being made on resolving the trade disputes between China and the U.S., it's possible that the company could be operating against a more favorable backdrop this year, but the business's strong position in fields like artificial intelligence and autonomous-driving technology give it avenues to long-term success even if more volatility hits in the near term. Baidu stock is valued at roughly 20 times the average analyst target for this year's earnings. 10 stocks we like better than BaiduWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Baidu wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of December 1, 2019 Keith Noonan owns shares of Baidu and iQiyi. The Motley Fool owns shares of and recommends Baidu. The Motley Fool recommends iQiyi. The Motley Fool has a disclosure policy.Source