Market capitalization companies Baidu is "only" $67 billion against $368 billion in Alibaba Group and $340 billion in Tencent. Revenue for 2017 year - $12 billion in growth 20%, EBITDA profitability - 32%. The multiplier to revenue is two times lower, than Alibaba and Tencent: On the one side, due to not so fast growth, but most importantly, investors are much less optimistic about future success.
It could seem, that the company is "so-so", but firstly, $67 billion is seven "Yandex", and secondly, she has or has had products in major online markets, without Baidu, the entire Chinese Internet would be completely different. Separately, it can be noted, what did Baidu cost in the summer $98 billion, but Chinese companies are having a hard time due to trade wars, and IT companies too, you can write a separate article on this topic.
Baidu has five major destinations.
- Search - search service.
- Newsfeed is a "smart" feed like the Yandex.Zen service.
- iQiYi - video service, mix of YouTube and Netflix.
- FSG - financial services.
- AI projects.
Also Baidu owns 20,5% Ctrip (globetrotting), 2,3% DiDi (taxi), 5% Ele.me (food delivery) And 3,2% Bitauto (car sale) - all together it costs about $8 billion.
Search and related products
Main stream, generated in the second quarter 2018 of the year 61% proceeds, but that has grown over the year by only 16%. The company launched a web search far away 2000 year, starting by providing white-label to other sites. A year later, she opened her own website Baidu.com, Earning, as it should be, on contextual advertising. IN 2005 year went to IPO and cost $4 billion.
It is worth noting, there are few countries with a strong search service - only Russia and China (with a stretch more South Korea and Japan). Usually, wins everyone Google, but in China it was blocked: officially in 2010 year and actually - in 2012. Even if recent rumors of a potential comeback turn out to be true, it will be difficult for him.
Different calculations contradict each other, but can be considered, what does Baidu have 70% local market, and the rest 30% shared between Tencent's Sogou and Alibaba's Shenma. Sogou recently went public and is worth $2,5 billion, knows how to search public WeChat content and gets traffic from Tencent resources - WeChat, Browser, site and so on. Shenma does not have a desktop version, but this is the default search in the most popular Chinese browser UCWeb. Besides them, there is also Haosou of the antivirus company Qihoo. 360, but his share is already intangible. Speaking of competition - in 2014 Baidu tried to enter the Brazilian market: launched a search and even bought a local Groupon, but it didn't go.
Mobile Baidu
77% mobile audience brings revenue. For a separate application, similar to Yandex (it's search engine, not a browser), WANT — 444 million, а DAU — 148 million. Impressively many. In fact, this is also a browser., but with a fixed Baidu homepage and voice search. It also integrates a news feed and short video.
They want to become a kind of WeChat: the webmaster registers an account and links his site, when visiting, the user can subscribe to the account's news or write him a message - everything is like with official WeChat accounts. Such sites are raised in the SERP, they say, what 38% the results are exactly the same.
In April, we launched mini-applications like WeChat or "VKontakte Services". Seems, there are still few benefits for developers: no social graph, no payments. But they know how to open from the search, and probably, they will also be raised in the SERP. Now there are only such applications 50, some of it comes from friendly services: iQiYi, Ctrip, Uxin and others.
Jiandan Experimental App with Advanced Voice Search Launched in June (for example, the same phrase, spoken in a child's voice and a man's bass, will return different results) And, main, no ads in the SERP - a dubious signal.
Other Products
Compared to our search services, Baidu has an unusually large number of its own projects. According to popular queries, five to six links out of ten lead to Baidu services.
Baidu PostBar - launched in the distance 2003 year, closest to forums of interest, but there is no exact analogue in Russia. Each search query corresponds to a forum with a set of topics, and if for some request this suddenly does not appear, you can become the first. Moderator appointed by Baidu from among the most active users. Follow model is also present, but taking into account that, what 69% traffic still comes from search, she is clearly not the main one.
The project makes money on advertising and a little on VIP membership. IN 2016 year there were attempts to tie short videos and live broadcasts with gifts, but did not fly. Amazing, but social networks like Weibo still haven't completely killed the project: 191 million unique users on the web and MAU 80 million from an app - that's what search engine support means.
Baidu Zhidao — Q&A-service like "Mail.Ru Answers". Zhidao leads the web by a wide margin, but the app lags behind Zhihu, supported by Tencent. All traffic, it's clear, from search.
Baidu Encyclopedia - Chinese Wikipedia, launched in 2008 year. There are two reasons for existence: Firstly, certainly, traffic from search, Secondly, periodic locks of the original Wikipedia.
Besides, you can mark the site, browser, android app store, mobile antivirus and virtual keyboard, directing searches, - but no major successes: they all rank second to fourth after Tencent and Alibaba products. But the cards compete on equal terms with AutoNavi from Alibaba (both MAU projects have 290 million), and a cloud like Dropbox or "Mail.Ru Clouds" generally takes 71% market by audience.
News feed
Newsfeed - "smart" feed based on data collected about the user (mostly clickstream), not his social graph. The closest domestic analogue is Yandex.Zen. Advertisements are placed between publications and within the articles themselves, moreover, the authors receive royalties only from the second. In addition to the usual materials with text and pictures, meet short videos - recently talked, that penetration has already reached 50%.
There is no separate application, the ribbon is embedded in other Baidu products: search, browser and Baidu PostBar. In spite of this, results are highlighted separately: such advertising had 10% Baidu's revenue, year-on-year growth 213% - it's a sin not to boast.
Overall in China Toutiao, Kwai and YY set trends for AI feeds, short videos and live broadcasts. Apps with large audiences implement these features and monetize on them, even when it is not obvious from the western point of view of the product: dating service Momo and music apps Tencent make money mainly on IVAS gifts in streams.
IQiYi video service
Baidu's Most Notable Post-Search Success - iQiYi. This spring, continuing to consolidate it in their accounts (that is, Baidu still has control), took part of the shares of this subsidiary to IPO, current capitalization - $18,5 billion. Service generates for Baidu 24% growth proceeds 51%.
I already talked about Tencent Video, iQiYi - a competitor from Baidu. Product-wise, it's a mixture of user-generated content with social elements like YouTube and paid professional content like movies., TV series and shows like Netflix. Huge audience - 419 million monthly active users. Interesting, that most users watch the show from smartphones, not on the big screen.
42% revenue - advertising, 40% - subscriptions (grow the fastest), 18% - content licensing, live broadcasts and so on. China began to fight piracy in 2007 year, in 2014 finished off the largest, but users have not yet weaned: despite the price of only $3, only buy a subscription 15% spectators.
Investors hope for change, but so far all revenue is eaten up by content licensing costs (56%) and your production (19%). Annual subscription is sold in bundle with JD membership. Unexpectedly, that JD agreed with iQiYi, not with Tencent Video.
It is worth noting, Baidu's music is worse, than with the video. Baidu Music sold in 2015 year, instead, they will now invest in NetEase Music.
financial services
A deal has already been announced to deconsolidate the direction to a separate company Du Xiaoman, but in the reporting for the second quarter 2018 year revenue was still included, 4% Shared. From a product point of view, this is an electronic wallet, issuance of loans and wealth management (investment and capital management). Notable successes in comparison with WeBank and even more so with Ant Financial have not been achieved here., alienation of a non-core asset looks more like the right step.
By the way,, in February, Baidu sold its grocery delivery business to a player from Alibaba Ele.me for $500 million and $300 million for future Baidu traffic. On the one hand, a year earlier, the business was valued several times more expensive, on the other hand, the fierce competition of subsidies in this market still killed Baidu Waimai, who was not ready for war., at the time of sale, it occupied only 5% market.
There is also Baidu Nuomi - a variation on the Groupon theme, but also dying: Total 4% market, in 2015 year was 14%. For comparison: у Meituan (Tencent team) here 36%, а у Koubei (Alibaba) — 56%. The direction of film tickets in May was handed over to iQiYi for $200 million.
Artificial Intelligence
With 2017 Baidu has been pushing for, what is an "AI company". There are two main projects in this area: voice recognition and self-driving cars.
Sleeps - voice command recognition engine, which is supposed to be used in other people's devices, already talking about 25 million active. The service is also available on Baidu apps, plus we have already launched the third "smart" column Xiaodu - they sell cheaper than the cost price, to accumulate data. Competitors have similar devices, Alibaba and Xiaomi rely on technology from other companies, but if need be, buy.
Apollo - open source operating system, hoping to become Android for Cars. They do not plan to develop equipment, only at the level of standards. Started far away 2013 year, in 2017, we moved our developments to open-source. By volume and results (the number of interventions by a live driver) tests are still noticeably behind Waymo.
The direction does not generate revenue, but Brokers only rate Apollo in 4% company value.