Baidu: Jumping into the trench of high investment for growth, "giving out red envelopes" led to the company's losses
| Profits turned from profit to loss. Baidu was serious about giving out red envelopes during the Spring Festival. Macroeconomic and advertising industry supervision made revenue worse. On the other side of the ocean, search giant Google's stock fell into a slump because its financial report was lower than expected. Baidu suffered its first loss in 14 years due to sluggish revenue growth, rising traffic costs, and excessive Spring Festival marketing red envelopes. Overnight, the stock returned to many years ago. According to the financial report disclosed by Baidu, the company's revenue in the first quarter increased by 15% year-on-year to 24.1 billion yuan. Excluding the impact of business splits, revenue increased by 21% year-on-year; but due to the rapid increase in costs in the first quarter and the large investment in marketing expenses, profits turned from 6.69 billion yuan in the same period of last year to a loss of 330 million yuan. Internet marketing revenue, which accounts for the bulk of Baidu's revenue, increased by only 3% year-on-year. The company said that this was mainly due to the impact of the macroeconomic environment and the result of strengthened supervision of some advertising industries, such as medical, online games and financial services. The good days of PC search have long ended, and Baidu has been dragged into the trench of "high investment for growth" by its opponents. Baidu's days of making money by lying on the PC search gold mine have long ended. Facing the mobile Internet, Baidu is still in a difficult transformation period. Among the former BAT Big Three, Tencent got the first-class social networking with WeChat, and Alibaba's e-commerce still stands out from the crowd. Only Baidu failed to establish a solid moat on the mobile side. On the one hand, it is still fighting with Toutiao for content information flow products, and on the other hand, it is actively laying the groundwork for a longer-term AI layout. Since 2018, it can be seen from the financial report data that Baidu has significantly increased its marketing investment. This is largely inspired by the rising stars such as Toutiao and Qutoutiao. These companies often rely on high investment and spend money in exchange for growth and time. In the situation of Internet sinking, they have been tried and tested. In terms of product strategy, it can also be seen that Baidu's information flow product layout has a lot of Toutiao's product matrix. That is, Baidu APP versus Toutiao APP, Haokan Video versus Xigua Video, and Quanmin Video versus Huoshan Video. In short, in the information flow trench, Baidu is moving closer to Toutiao in terms of products and marketing, exchanging high investment for growth. There is no doubt that profits will be under pressure in the short term. High investment = high growth? Does it cost 119 yuan to add a net active user? According to data disclosed by Baidu, the daily active users of Baidu's flagship APP reached 174 million, a year-on-year increase of 28%, a month-on-month increase of 8%, and a net increase of 13 million people; the daily active users of Haokan Video increased from 2.5 million in the same period last year and 19 million in the fourth quarter of last year to 22 million, a net increase of 3 million month-on-month. The company did not disclose the daily active growth trend of other products, but the combined DAU of the two main information flow products increased by 16 million month-on-month. According to Baidu's claim that it has issued 1.9 billion red envelopes, it costs about 119 yuan to get a daily active user. This price is scary at first glance, but for old products, it costs so much to buy a real active user in the market. The total user time of Baidu App and short video information flow increased by 83% year-on-year. The number of content creators of Baijiahao reached 2.1 million; the monthly active users of smart mini-programs reached 181 million, a month-on-month increase of 23%. Hardware and artificial intelligence continue to make progress, but it has not yet been converted into considerable profits . Xiaodu Assistant continues to maintain its leading position in China. As of March 2019, the number of smart devices equipped with Xiaodu Assistant reached 275 million, a year-on-year increase of 279%. In the first quarter alone, the shipment volume of Xiaodu smart speakers exceeded the sales volume of the whole year of 2018. The number of voice interactions reached 2.37 billion times in March, a year-on-year increase of 817%. At present, Baidu Brain has opened 171 leading AI technical capabilities, and more than 1.1 million developers have access to Baidu AI Open Platform to use Baidu's AI capabilities such as speech recognition, image recognition and natural language processing. Enterprises and developers can easily apply AI to new and developed applications through Baidu Smart Cloud. In terms of autonomous driving, Baidu Apollo's road test mileage in Beijing is more than 10 times that of the second in the industry, and the company's autonomous taxis in cooperation with Changsha will soon be on the streets. iQiyi's paid membership increased to 96.8 million, and content costs decreased month-on-month, but it still maintained losses. In the first quarter of 2019, iQiyi's revenue was 7 billion yuan, a year-on-year increase of 43%. As of March 31, iQiyi had 96.8 million total subscribers, up 58% from 61.3 million in the same period last year, of which 98.6% were paid subscribers. iQiyi's membership services, online advertising, content distribution and other receivables accounted for 51.3%, 31.6%, 0.7% and 1.5% of its revenue, respectively. Among them, although the year-on-year growth rate of online advertising remained the same, the online advertising business continued to decline month-on-month due to the economic environment and the delay in the broadcast of some content. At the beginning of 2019, due to the star salary limit policy in 2018 and the increase in self-made content, iQiyi's content costs fell by nearly 20% month-on-month this quarter. However, iQiyi's operating loss in the first quarter was 2 billion yuan, compared with an operating loss of 1.1 billion yuan in the same period last year. iQiyi's operating loss rate in the first quarter was 29%, compared with an operating loss rate of 22% in the same period last year. The net loss was 1.8 billion yuan, compared with a net loss of 400 million yuan in the same period last year, and the loss has widened. |
<<: WARC: Global social network advertising reached $17.9 billion in Q1 2019
>>: Trustdata: Mobile Internet Industry Rankings in April 2019
Recommend
How to waterproof the bathroom? What are the waterproof materials for the bathroom?
Before waterproofing the bathroom, you need to ch...
Can I breastfeed if I have mastitis?
New mothers may be troubled by diseases when they...
What is the situation of increased leucorrhea and odor?
Women's vagina will have secretions flowing o...
What are the methods of Chinese medicine for treating polycystic ovary
Polycystic ovary problem is a problem that will s...
CMR: India's tablet market to grow 79% QoQ in Q3 2024
According to a report by CyberMedia Research, the...
Picture of abscess on the upper part of female vulva
Many women do not pay attention to hygienic maint...
Early treatment of ectopic pregnancy
We also call ectopic pregnancy ectopic pregnancy....
23 weeks pregnant hard belly
A hard belly at 23 weeks of pregnancy is caused b...
What to do if you have a miscarriage in early pregnancy
People say that the first three months of pregnan...
On sauna days, strengthening the spleen, removing dampness, and preventing heatstroke... are essential. Do these 6 things and you will be less likely to get sick all year round!
As the saying goes, "Train in the coldest da...
.When I was four months pregnant, I would sometimes feel pain in my right waist when I sat on the bed and couldn't move.
Pregnancy is very difficult for many women, becau...
Causes of heavy menstrual bleeding
Everyone must know the importance of menstruation...
Why is there blood when women wipe after urinating?
For women, because the structure of their reprodu...