Shares in Chinese internet giant Baidu jumped on Thursday on quarterly earnings that topped expectations despite falling revenue as the company clamped down on dubious ads.

Revenue in the final three months of last year came to $2.62 billion (18.21 billion RMB), down 2.6 percent from the same period the previous year, the company reported in New York, where it is listed.

Income in the fourth quarter plunged 83 percent from a year ago to $1.7 billion. The Wall Street market-reference earnings per share, which excludes certain items, was 93 cents, two cents above the consensus estimate.

It was the second quarter in a row the company has reported a slump in revenue, following the authorities' introduction of new controls on advertising.

The decline came after the company was embroiled in scandal and lashed by Chinese media over the death of a student whose family used the search engine to seek a cancer cure that did not work.

Early last year, Baidu was summoned by regulators, and following a public outcry, the government announced stricter controls on internet advertising, while the company itself stepped up checks on clients.

Starting in the third quarter, Baidu required customers to submit related internet licenses and verified enterprise bank account information, according to the company.

"During the fourth quarter we largely completed our initiative to ensure that new and existing customers meet our stringent quality requirements," Baidu chief financial officer said in the earnings statement Thursday.

"We believe that the impact of these initiatives is mostly behind us."

Baidu executives stressed a focus on building better user experiences, particularly through investments in artificial intelligence for self-driving vehicles, financial services, and cloud-computing offerings.

Baidu said that artificial intelligence specialist and former Microsoft executive Qi Lu, whom the company hired last month as chief operating officer, had been appointed to the board of directors.

"AI is an enormous opportunity that will revolutionize the internet and traditional industries," Baidu chief executive Robin Li said in the earnings statement.

"Baidu , in particular, is well-positioned to lead the AI wave in China."

Baidu shares were up more than two percent to $188.55 in after-market trade on the Nasdaq.

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