(REUTERS) - China's Baidu Inc reported its first-ever quarterly revenue decline as a government crackdown on healthcare advertising earlier this year continues to take its toll on the country's top search engine.

The company also said it expects fourth-quarter revenue of 17.84 billion yuan (S$3.67 billion) to 18.38 billion yuan, representing a decrease of 4.6 per cent to 1.7 per cent from a year earlier.

Baidu's shares fell 3.2 per cent to US$169.53 (S$236.43) in extended trading.

Public uproar has hounded Baidu after a student suffering from a fatal form of cancer blamed the company for directing him to suspect and ultimately ineffectual treatment.

Regulators responded by slapping curbs on the firm's lucrative healthcare advertising business.

In a search for new business with more potential for growth, the company said earlier this month it would establish a US$3 billion investment fund focused on mid- and late-stage deals in the internet sector.

Baidu has also placed long-term bets on artificial intelligence and automated driving, but these projects are still far from profitability.

Baidu's revenue fell 0.7 per cent to 18.25 billion yuan in the third quarter ended Sept 30, from a year earlier, the company said on Thursday.

The revenue decline is slightly smaller compared with a drop of 1 per cent estimated by a Thomson Reuters survey of 15 analysts.

Net income attributable to the company rose to 3.10 billion yuan from 2.84 billion yuan.

The company was expected to post net income of 2.27 billion yuan, according to a Thomson Reuters survey of nine analysts.