China’s leading search engine Baidu which is often compared to Alphabet’s Google is showing no signs of slowing down and is still betting big time on video content as it tries to stave off stiff competition from its rivals, according to a report by TechCrunch.
As per the latest financial results released by Baidu, its video streaming business, iQiyi has posted a net loss of 9.1 billion yuan (1.3 billion) in 2018 as compared to the loss of 3.74 billion yuan posted in 2017.
It was not that long ago that Baidu announced that it has raised $500 million in convertible notes to fuel its funding spree. The video site aims to become the ‘Disney of China’ with a Netflix like production house.
The cash burn appears to be paying off with iQiyi adding nearly 36.6 million last year and increasing its total subscriber base to 87.4 million. 98.5 percent of the subscribers were paying for the content, which is a big number when we take into account that users in China are more used to free content as online piracy is rampant in the country. iQiyi’s main competitor Tencent has nearly 82 million users as of Q3 of 2018.
As per the financial report, this is the first time that Baidu has surpassed the $ 100 billion yuan earnings mark and the revenues for 2018 stood at 102.3 billion yuan, an increase of 28 percent from 2017. The main chunk of the company’s revenue came from online advertising, news feed and video content.
Baidu’s is also facing stiff competition from ByteDance, a new media company with a suite of news and video apps that have been a hit with the marketers. To fend off competition from its adversaries, Baidu paid $133 million in cash prizes to lure users to its namesake search app on the eve of Chinese New Year.
Baidu has been at the receiving end of constant criticism for a number of issues and one of the main criticism against Baidu has been the quality of search results. But in spite of all these criticisms, Baidu has continued to retain its Numero Uno status in the market, with Google absent from the market and other players like Bing and Sogou still remain the underdogs.
Baidu is slowly becoming one of the main players in the AI arena and the company made a total of 13 investments in 2018 making it the most important entity in the AI space.