Baidu: Im too hard

category:Finance
 Baidu: Im too hard


The four financial reports in 2019, like the four electrocardiograms, appropriately depict the ups and downs of Baidu in this year.

In the first quarter, baidu lost money for the first time in 15 years after listing, and the veteran in charge of search business resigned to Hailong, and the market value of Baidu fell by 25% in the next two days; in the second quarter, Baidus core online advertising business saw a negative growth, with the overall revenue growth falling to 1%; in the third quarter, Baidus total revenue saw a negative growth for the first time, but its profit began to pick up; in the fourth quarter, Baidus business recovered, with revenue and net profit Run better than expected, but then face the negative impact of the epidemic.

The pattern of bat was officially rewritten this year. Meituan, Jingdong, and even pinduoduo, which has just been established for four years, have successively surpassed Baidu in market value, and Baidu once fell out of the top five camps of the Internet.

Comparison chart of market value of Internet companies in China (data as of February 29)

Fourth quarter results seem to be a good start for 2020. In this latest financial report, Baidus revenue growth began to turn positive, and its net profit tripled, surpassing Wall Streets expectations. But the epidemic is the biggest uncertainty for the next quarter. Baidu said that affected by the outbreak, revenue in the first quarter of this year may have a maximum drop of 13%.

In addition, baidu is facing a fierce attack from outside. On the same day that the financial report of the fourth quarter was released, byte leaped online to search for headlines, putting the artillery fire into the base camp of Baidu search. The second stage rocket of information flow + short video is constantly devouring Baidus traffic city. And internally, the personnel shock after Xiang Hailongs resignation continues. Its still unknown whether the younger generation, represented by Shen Shuo, can bear the banner of Baidus recovery.

Despite the cold financial figures, Robin Li has to think about whether Baidus crisis is really over. Where will he lead Baidu in 2020? Can the Baidu that lets a person respect return?

Rusty money making machine

Baidu is like a money making machine. It still makes money, but its rusty, so it needs to be repaired.

Baidus whole 2019 starts from the fermentation of the public opinion field.

Baidu is in a hurry to build its own ecosystem and get rid of the path dependence on traditional search in a way of self transformation. Liu Fang, a former Baidu employee, told the company.

In fact, Baidus crisis has been buried many years ago.

Baidus revenue and net profit growth over the years. Cartography / fuel Finance

In the past many years, Baidu has been known as the money making machine in the industry, which controls the Internets core search traffic entrance. Almost all Internet companies have bought tickets here. Meituan, qunar, 58 Tongcheng and other companies, most of the early traffic came from Baidu.

The rise of APP in the era of mobile Internet is the first round of impact on Baidu. Wechat, Taobao, todays headlines and other products have grown into super applications, and the vertical ecology represented by consumption, film and television, music, and life services has rapidly formed. Users began to search for goods in Taobao, search for information in wechat, and book tickets on Ctrip, all of which are beyond Baidus reach. u2014u2014Baidu search is no longer everywhere.

The rise of information flow and short video is the second round of impact on Baidu. Todays headlines replace search boxes with machine algorithms, and search display results with endless streams of information, while short videos are accelerating the process. Short video is the next generation product, and the biggest threat to Baidu is that it diverts users attention. In fact, from traffic distribution and commercial realization, it is cutting Baidus cake. Liu Fang said. u2014u2014Baidu search is no longer the only traffic hub.

Baidu and byte beat revenue comparison mapping / fuel finance. (byte beat: revenue of 140 billion yuan in 2019 is an outside guess, unconfirmed)

In the past, baidu could earn ecological money, because the entrance was entered through Baidus search. Now, the ecological money cant be earned, so it can only earn the money just needed by search. But if Baidu cant do incremental search from the bottom innovation dimension, its also drinking poison to quench thirst. Liu Fang analysis.

91 wireless, which spent $1.9 billion in 2013, was officially announced offline on February 17 this year. In 2016, when the revenue of headlines reached 6 billion yuan (about one tenth of Baidus), baidu began to become a direct threat, so Baidu decided to make efforts to stream information. Short video products targeting watermelon video are good-looking videos, not mainstream players in the field of short video.

Emerging battlefields are losing, but core battlefields are facing development bottlenecks.

Baidus quarterly online advertising revenue and growth. Cartography / fuel Finance

On Wall Street, investors are asking Baidu for profits, but excessive commercialization will damage the search ecology. Wei Zexis event is a lesson in the past. In order to support the content ecology, baidu broke the distribution principle of search engine to guide its own product 100 brands, which caused social controversy in January 2019.

Baidus dilemma is not only to ensure the continuous growth of its core search business, but also to make breakthroughs in information flow, short video, artificial intelligence and other fields. Baidus machine is too old. It really needs to be repaired. Liu Fang said.

The person in charge of Baidu should not only be willing to operate a machine, but should build an ecological park.

After the fourth quarter financial report was released, Robin Li sent a full letter to Baidu, calling 2019 Baidus key change year. In fact, throughout 2019, Baidus organization and personnel experienced a big shock.

In May, the resignation of Xiang Hailong, the president of Baidu search company, was a key signal. In the past, he built Baidus sales network and dominated the whole search system. Before and after his departure, Zheng Zibin, Gu Guodong and Wu Haifeng, three vice presidents, left successively. In September, Wang Lu, another vice president of Baidu, left. He is also a member of e-staff, the top decision-making level of Baidu.

At the same time, baidu launched the executive retirement plan. Liu Hui, Baidus senior vice president of human resources, and Zhang Yaqin, Baidus president, retired in May and October, both of whom are e-staff members. A group of young cadres have been promoted, and the young generation trained by Wang Haifeng, Shen Qiao and Jing Kun have come to power, among which Shen Qiao has become a member of e-staff.

Along with the personnel adjustment, baidu high-level shuffle quickly, carried on the power reconstruction.

At present, Baidu e-staff has six members. They are Robin Li, Yu Zhengjun (CFO), Wang Haifeng (CTO), Shen Dou (senior vice president), Liang Zhi Xiang (vice president), Cui Shanshan (vice president).

Baidu estaff architecture (information from public data) mapping / fuel Finance

Baidus current core decision-making level has a new vision of matching the old with the young. Promoted by the younger generation (Yu Zhengjun, Wang Haifeng, Shen Dou), the veteran humerus and the founding veterans (Cui Shanshan, Liang Zhixiang) who had been called back, became the people who decided the future of Baidu under the guidance of Robin Li.

Some of them have left Baidu and have been recalled in recent years. Cui Shanshan, Shi Youcai and Zhang Dongchen returned one after another to take on the important task again. Cui Shanshan, one of Baidus seven swordsmen, returned at the end of 2017 and is currently in charge of human resources. In June 2019, Shi Youcai returned to take over the sales system of Baidu mobile eco business group (MEG) to deal with the shock brought by the resignation of executives of Sales Department of Hailong.

It is worth noting that only Wang Haifeng and Shen Shuang are responsible for the business line of the core decision-making level of the six people, and Wang Haifeng is responsible for the AI technology platform system and basic technology system. Shen Shuang is the new senior vice president, and is fully responsible for the mobile ecological business group (MEG).

Mobile ecological business group - from this transformation to the search company in charge of Hailong, we may see Baidus determination to transform from the name change. Shen Chao was responsible for Baidus information flow. In 2018, he launched the intelligent small program, aiming to build a closed ecosystem of Baidu.

Baidus whole strategy is to do closed ecology. Originally Baidu is an open strategy, baidu does distribution, and ecological partners do everything behind it. Now its all Baidu does from the beginning to the end. Wang Hongkun, an entrepreneur in the search industry, analyzes the finance and economics of fuel.

Baidu cant break through the vertical app, so it can only enrich its search content. In the past, Baidu has made a lot of investment in mobile Baidu, tieba, baidu mobile browser, baijiahao, good-looking video and other products.

In addition, in 2019, baidu invested in the fruit shell of Pan science and technology interest community, holding 9.38% of the shares, leading the investment in round f financing of 434 million US dollars, and also invested in Kaishu story telling and seven cats novels, all of which are enriching its closed content ecology.

In the fourth quarter financial report conference call, baidu listed baijiahao, smart applet and hosting page as three ecological pillars. In many industries, businesses with HTML5 websites are switching to Baidu hosting page as the landing page of their search results. According to the data provided by Baidu, Baidus revenue from hosting pages reached nearly a quarter of Baidus core online marketing service revenue in the fourth quarter of 2019, and its smart apps received 30% of the search traffic.

The person in charge of Baidu should not only be willing to operate a machine, but should build a closed ecological park. Machines can be easily corroded, the park will not. Liu Fang said.

Baidu ushered in a more difficult year?

Pay for the strategic swing of the past, but the market doesnt have much time for Baidu.

In 2019, Baidu saw the shock. Baidu called it change. Robin Li thought it was we spent a whole year practicing our internal strength and completed the in-depth restructuring of our organization and business. Judging from the latest financial data, those dark and bad days may have passed for the time being.

Baidus revenue and net profit growth in the four quarters of 2019. Cartography / fuel Finance

After Baidus financial data and market value of share price fell to freezing point in the third quarter, it finally showed some effects of changes in the fourth quarter: revenue and net profit began to recover growth, operating expenses further reduced, and the proportion of sales and management expenses in revenue fell to the lowest level in the past three years. The effect of refined operation began to show.

But is Baidu really out of the crisis?

Wang Hongkun said to fuel finance and economics, financial figures are only a result, a number game, and do not have great reference value. He has calculated that Baidus revenue can be increased by 10% for each additional advertising space on the front page of Baidu search. Strategic layout and industry competition are the fundamental issues.

The number one enemy should be byte skipping. Coincidentally, on the day of Baidus fourth quarter financial report, the independent app of headline search was launched, which could be downloaded on Android, and byte beat set off the ultimate battle of hard hard hard Baidu.

Baidu and Toutiao originally belong to two different battlefields, which can be irrelevant to each other, but the problem is that the first side to win will spread the battlefields to the other side. So Baidu cant be alone. Liu Fang said.

Wall Street should not only look at financial data, but also user data. Artificial intelligence may be a little far away, but the battle of information flow is already at hand.

Baidus most important mobile app, baidu app, recently released 195 million daily data. Todays headline is about 200 million, which is quite the same. Tiktok Kwai, but in the short video area, Baidus 22 million day live video released in the two quarter of 2019 is 22 million, and its voice has now exceeded 400 million.

At the product level, Baidu Post Bar has more than 300 million monthly live users, which is the most social application in Baidu system. Baidu mobile browser also has more than 100 million monthly live users. But these products do not have the power of blasting like vibrato, and tiktok can not be used to attract more attention.

In the past, almost all Baidus products were designed to save users time and improve the efficiency of information access, but in the era of short video, the most important thing is to grab users attention. A search engine entrepreneur said.

Baidu is paying for the past strategic swing. Internal reform may be a good medicine. Although the main channel of AI and information flow is clear, the uncertainty lies in how much time the market has left for Baidu?

According to the 44th statistical report on the development of Chinas Internet published by CNNIC in August 2019, although the total number of domestic search engine users continues to rise in 2019, the utilization rate has declined for the second consecutive year, from 82.8% in 2017 to 81.3%. Mobile search engine users also continued to decline, from 82.9% in 2017 to 78.2%.

The Internet advertising industry is under upward pressure. Under the background of poor external environment, business owners are reducing their advertising budgets. The novel coronavirus outbreak at Baidus key node of change has undoubtedly caused a blow to Baidu.

Baidu advertisers, most of them small and medium-sized business owners, are the most vulnerable to the epidemic. Wang Hongkun said.

According to the data released by Baidu financial report, at the end of 2018, baidu had 529000 advertisers, and the revenue contributed by a single customer was 40000 yuan. Wang Hongkun revealed that Baidu now has about 600000 advertisers. These small and medium-sized enterprises are weak in risk resistance. If Party A reduces the budget, Baidus income will be affected.

Wang Hongkun observed the latest industry data and found that in the last month, the filling rate of Baidu alliance was only 20%. Baidus quarterly financial report reminds that: in the first quarter of 2020, revenue is expected to decline by 5% to 13%, of which the revenue of Baidu core (search business) is expected to decline by 10% to 18%.

Robin Lis loneliness and stubbornness

We need to have the mind and responsibility of a large company, and we need to maintain the efficiency and creativity of a small company.

Robin is lonely. He wants to do Baidu well and become a respected company, but I dont think the outside world understands him. A former Baidu employee said.

In the age of Baidu or BAT camp, Robin Li was lonely, and his loneliness came from no rivals. Baidu search is the only one with almost monopoly position in Chinas Internet. Robin Li even openly said: if Google decides to return to China, we are very confident that we will win another PK once more.

When Baidu fell out of the BAT camp, Robin Li was also lonely. Melon eaters are waiting to see jokes, and the story of the decline of the giant is always watched.

Robin Li is a typical elite entrepreneur. He came back from the United States in 2000 with the top three invention patents in the world. Baidu is a typical engineer culture. The slogan simple to rely on seems to only apply to entrepreneurial teams. It is still used when Baidu has more than 40000 employees.

In bat, Baidu has always been skilled in technology and is called Huangpu Military Academy of Chinese engineers. Among Chinese Internet companies, baidu is the company that attracts the most top technology talents in the world. However, those AI talents who left Baidu, many of them left Baidu and became rivals of Baidu. Take auto driving as an example. The founders of Jingchi, horizon and pony.ai are all from Baidu.

Robin Li led Baidu to walk further away on the road to AI. Baidu is the only Chinese company that has entered the top four AI companies in the world. Unmanned car, baidu brain, chip, voice assistant, these exploratory frontier areas, are all areas that need continuous investment and can not see results in a short period of time.

Can you imagine a handsome man, once the richest man in China, coming to the company at 8 oclock every morning and having a meeting with you to listen to the report? Liu Fang said, he must not be for money. He has a dream.

But the disadvantages of the business model of search engine itself, Baidus negligence in social responsibility and corporate values, and the once Wei Zexi event have already put a negative label on Baidu. Its not easy to tear off the label. In July 2019, Baidus annual AI developer conference, Robin Li was drenched on the stage by a black man in the speech.

It used to be too easy for Baidu to make money lying on its back. At its most brilliant time, baidu did not really attract a group of loyal ecological partners, nor did it well interact with the public, which also led to Baidus public opinion dilemma today. Wang Hongkun analysis.

It is difficult to find an objective and correct coordinate system to evaluate Baidu. But one thing to be sure is that Robin Li has taken over power and delegated certain authority to more young people, who may be able to lead Baidu out of trouble.

In any case, 2020 will not be an easy year for Baidu. We need to have the mind and responsibility of a large company, and we need to maintain the efficiency and creativity of a small company. Robin Li said in an internal letter.