Baidu Current Crisis
- On May 29, 2019
- baidu challenge, baidu crisis
In 2010, US technology giant Google left China market with tears. Without a strong opponent, Baidu’s search business has grown by leaps and bounds. After one year, Baidu’s market value surpassed Tencent and became a Chinese Internet giant. At that time, Baidu had unlimited scenery.
However as times bing, Baidu, once brilliant, has now fallen into a wolf. On May 16, 2019, Baidu announced its first quarter earnings report. On the second day, the stock price fell 16.52%, and then fell 8.39% on the third day. In the same period, Alibaba’s market value was 404.3 billion US dollars, and Tencent was 31.246 billion Hong Kong dollars. This is equivalent to Baidu’s already only one-tenth of Alibaba and Tencent.
How is Baidu now? We look for answers from the latest disclosures.
In the first quarter of 2019, Baidu’s revenue was 24.123 billion yuan, lower than analysts’ expectations of 24.27 billion yuan, an increase of 15%. The normal revenue growth rate is mainly due to the substantial increase in iQiYi revenue, which is due to the contribution of its member income and cloud service revenue. Baidu’s first-quarter loss since its listing in 2005 was a net loss of 327 million yuan, down 105% from the net profit of 6.7 billion yuan in the same period last year.
In the same period, Tencent and Ali Internet advertising revenues have slightly declined, which also reflects the relative sluggish state of the Internet advertising market.
The rapid slowdown of Baidu’s advertising business has a certain relationship with the Internet advertising industry. But the most important thing is Baidu’s own problems. Baidu relies on search to earn advertising revenue. What is the problem?
Baidu is a search engine, belonging to the tool class, the user staying on it will be shorter. Like today’s headlines or WeChat, one is reading information, the other is social, the user stays for a long time, and it is easy to cash out.
Baidu is used to making money on search. But now, the model of earning advertising revenue based on search has encountered no small challenge. Because Internet giants have separated high-quality content and rejected Baidu.
For example, the high-quality content of the WeChat public account, Tencent is intercepted inside its own. Alibaba is also, the various information of e-commerce does not allow you to crawl Baidu crawlers. There is also a headline, and quality content is placed in your own home. This is a form of information island, which is very dangerous for Baidu. Because the more you go backwards, if the user visits Baidu can not query the results or content that the user wants, he will discard Baidu.
There are also a variety of apps that take a lot of time away from users.
In the information flow advertisement, the typical representative is the headline system. A company that relies on algorithms has abandoned the “people looking for information” that Baidu search relies on, and has realized the transformation of “information to find people”. The emergence of phenomenal products such as headlines and vibrato today diverted the share of advertising that originally belonged to BAT.
At present, Baidu is panicked and aware of the dangers of the original search ecosystem, so it has also begun to support its own information flow, such as the Baijia number. But compared to other content giants, the scale is still relatively small.
Now, Baidu has reached a crossroads of crisis, is it moving on, or is it abandoned by the times?