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Hao gambling AI Baidu value is not worth?

via:全天候科技     time:2018/11/24 12:43:47     readed:119

Li Yanhong seems to be full of confidence in Baidu AI. Since the announcement of All in AI in mid-2017, Baidu’s business adjustment has begun to take shape. In November 2018, at the Baidu World Congress, every participating guest got a copy of Baidu AI Industry Primer, which mentioned more than 50 AI landing cases covering travel, medical, finance, retail, logistics. Waiting for 15 industries, 90% are To B customers. At the conference, Apollo and FAW's L4 driverless car were placed in the most prominent position of the venue. atTencentWhen the official announcement will form an unmanned team, Baidu's Apollo system has been upgraded to the third generation, and cooperation with FAW, Volvo and other companies, the first batch of unmanned buses, unmanned vehicles have been on the road.

Li Yanhong also excitedly demonstrated the small intelligent speaker, tested the eye screening system, and also explained the opportunity of Baidu AI from agriculture, industry to medical treatment.

At the beginning of 2018, Li Yanhong became the first Chinese Internet entrepreneur to be on the cover of Time magazine. On the same day, Baidu's market value was 88.8 billion US dollars, which marked the perfect ending for Baidu's 2017 turnaround. It can be said that Baidu is already the top artificial intelligence company in the domestic comprehensive technology reserve.

However, there are still variables. The departure of Lu Qi has caused Baidu's market value to fall, the personnel structure has changed, and the AI ​​business results have not been reflected in the financial report. The information flow and search business are still the mainstay of the financial report. In September, Baidu officially launchedAppletsStarting from the information flow, the counterattack of ToC was launched. In the third quarter, the growth of information flow business was recognized by investors.

From the third quarter earnings report, Baidu's investment in AI research and development has exceeded 7 billion yuan. After Lu Qi left, Baidu never mentioned the slogan of All in AI. When the giants have turned to ToB, Baidu, which took a step ahead, still faces the choice, and needs to think about the next step, whether it is worth gambling AI.

On January 17, 2017, before Baidu announcedMicrosoftLu Qi, the global executive vice president, joined the Baidu Group as president and COO. At that time, Baidu was in a public opinion crisis such as the “Weize Zexi Incident”, the O2O business fell, and the overall net profit of the 2016 financial report fell sharply. Lu Qi was placed on the burden of Baidu's transformation.

After Lu Qi took office, he soon led Baidu's internal business structure adjustment, and planned four quadrants of “main channel + key mission”. Artificial intelligence and information flow and search business together became Baidu's main channel. Affected by this, Baidu Post Bar business unit general manager Hu Wei, Baidu map business unit general manager Li Dongyu and many other executives have left in a month.

Lu Qi also put forward the slogan of “All in AI” and opened the road of Baidu transformation.

Among the six business groups currently set up by Baidu Group, in addition to the search companies that are mainly engaged in traditional search engine services, the remaining departments are all part of the AI ​​strategy. The Artificial Intelligence Group (AIG) is responsible for all of AI's AI technology research and development; the Intelligent Driving Group (IDG), which is mainly responsible for intelligent driving of automobiles; the Financial Business Group (FSG), which is mainly responsible for Internet finance business; Business Group (EBG);

On March 6, 2018, Baidu announced the establishment of the Smart Life Business Group (SLG), which was headed by Lu Qi personally.

Under the auspices of Lu Qi, the o2o project, Baidu takeaway, Baidu Medical, etc., which had been “crane tail”, gradually separated, and the main business channel was built around information flow and artificial intelligence.

To B business is the focus of Lu Qi's attention, DuerOS and Apollo asDevelopmentIn the short-term, the platform needs to be empowered by cooperating with enterprises to expand its influence and ultimately obtain benefits.

"Doing AI must have pains and must be questioned by investors." An investor in the field of artificial intelligence mentioned that Baidu had experienced many doubts in the early stages of its transformation, but due to the role of Lu Qi, Baidu was able to calm down. To recruit talents and carry out scientific research. In 2018, Baidu's market value returned to the peak of 2015, once more than 90 billion US dollars.

At the same time, Baidu, which has undergone major rectification, has also begun to enter the deep water area. On the one hand, the artificial intelligence business requires a lot of investment, and the landing process must be gradual. Only Apollo's startup investment exceeds 200 billion US dollars. The DuerOS development platform is grounded, and hardware such as smart speakers need continuous subsidies.

On the other hand, the search and information flow business still accounts for nearly 80% of total revenue, and needs to supplement the AI's huge expenses with 2C services to achieve a balance.

Investors close to Baidu mentioned to all-weather technology that AI business accounts for too little of Baidu's total revenue, and it is still difficult to use as the basis for its valuation. "Many people think that artificial intelligence projects are drawing cakes, for companies. The stock price has no positive help. Baidu has always been eager to monetize. Li Yanhong, as the chairman of the listed company, needs to be responsible for the investors, but All in AI will definitely affect the company's interests in the short term. This may be Li Yan. The reasons for the differences between Hong and Lu Qi.” The above investors mentioned.

In May 2018, Lu Qi announced his departure, Baidu's share price fell 9.54% on the day, and the market value evaporated nearly 10 billion US dollars overnight. Since then, the slogan of All in AI has also been raised. However, from the Baidu Partner Conference and Baidu World Congress in the second half of the year, this trend has been controlled to a certain extent. At present, the market value of Baidu is maintained at around $65 billion.

Li Yanhong took over the smart driving business group and the smart life business group that were originally led by Lu Qi, and set off the Baidu transformation banner.

AI's To B business is a new start for Baidu's transformation. Li Yanhong once mentioned that the most optimistic application scenarios of two artificial intelligences are smart home and smart traffic. These are all areas in which Baidu is making efforts to deploy. In addition to the To C business, it is necessary to link related business brands.

Before Lu Qi left, Li Zhenyu and Jing Hao were promoted as the leaders of the intelligent travel and intelligent life business groups. Both of them are old employees of Baidu. Although they are not technical cattle, they have played a major role in the team. Baidu AI therefore did not explode a large-scale departure wave.

From the Baidu Developer Conference and the Baidu World Congress, Baidu has not deviated from the main channel of artificial intelligence.

However, the problem that Li Yanhong is facing at this stage is that in the case that more than 60% of the revenue still depends on search and streaming media advertising, the profit of AI-related business needs to be put on the agenda, and the C-side and To B business are combined and the revitalization is greater. Market.

After Lu Qi’s drastic reforms, Baidu in transition faced a new situation. On the one hand, the development of information flow business in 2017 has gradually become a lively and short-livedvideoWaiting for the key to To C traffic entry, further empowering advertising marketing, and sharing revenue with the search business; on the other hand, Baidu also hopes to align with SAP, Oracle, Microsoft, etc. to a company that focuses on enterprise services (B-side). Through deep cultivating AI and cloud computing, it will launch counterattacks in areas such as autonomous driving that has a first-mover advantage.

But Baidu, who is "eager to monetize" in the eyes of investors, can hardly say whether the next step will be biased. This choice is related to Baidu's future.

As the focus of All in AI, the To B business in the field of artificial intelligence is rapidly developing. Baidu AI's three main businesses - DuerOS, Apollo system and Baidu cloud are based on B-side business. DuerOS and Apollo have only been online for more than a year and have completed three upgrades.

As the technical foundation of Baidu, Bai Zhiyun general manager Yin Zhiming will promote Baidu Cloud's "ABC+IOT" Trinity Strategy in all occasions - A is AI, artificial intelligence; B is Big Data, big data; C It is Cloud Computing, cloud computing, and IoT is the Internet of Things. This strategy also marks the transformation of Baidu Cloud to B.

In August, Baidu Cloud took the lead in launching the AI ​​to B platform. This is Baidu's AI technology, AI capability output platform, the goal is to accelerate the commercialization of Baidu AI in the enterprise market. Through extensive techniques such as deep learning and natural language processing, it is widely used in manufacturing, finance, urban management, and new retail. This is the focus of the B-side business from Baidu Cloud.

In the cloud computing business, Baidu made a late effort and officially entered the game in 2015. Compared to the market share of more than 50%Ali CloudIn fact, it is not conspicuous in the industry. But on Baidu's platform, Baidu Cloud is an important link to link various businesses.

"Baidu itself is a company in the cloud." Zhang Yaqin, president of Baidu, mentioned in an interview with the media that "the three major businesses are in the large data center and cloud, search, video and storage, and network disk." We have been doing these things for many years. Because of such a large application scenario, these data centers are the core of cloud computing."

Baidu Cloud also hopes to gradually break through the publicCloud diskThe inherent impression is to find more breakthroughs in the field of enterprise services. For example, the cooperation between Baidu Cloud and Youxin used cars is to upgrade the remote car through VR technology, and deploy the AI ​​camera in the online store to match the car through face recognition. Information, combined with cloud platform and business system to precipitate user data, provide support for follow-up operations. Baidu Cloud cooperates with China Eastern Airlines to help them build a new generation of intelligent customer service system to realize fast call and efficient processing of information data. Intelligent Driving (IDG) is undoubtedly One of the most important businesses of Lu Qi and Li Yanhong. At the Baidu World Congress, a new L4-class self-driving passenger car was parked in a conspicuous position. IDG general manager Li Zhenyu followed Li Yanhong to interpret Apollo's progress.

This product with FAW is scheduled to be launched in small batches in 2019 and will be put into more cities in 2020.

Unmanned driving is the blue ocean, and then forward is also a "no man's land." Many industry experts believe that even if you get a T3 license (a total of 5 levels of the temporary license plate for the automatic driving test, T3 is the highest level that the company has obtained at the moment), it is difficult to popularize the road in the short term.

Apollo is an open source project that provides complete hardware, software and service solutions, attracting partners in the automotive industry chain through open source, data, APIs, and cloud interfaces. At present, the number of Apollo automatic driving open platform partners has reached 131, including Volvo, Daimler, Ford, Bosch and other internationally renowned brands, and also cooperate with Jinlong commercial bus. This achievement also makes Baidu the world's largest intelligent driving software platform.

Lu Qi also clearly stated in Baidu that the best commercialization of artificial intelligence technology is to build an ecosystem. Li Yanhong also believes that as long as Apollo's ecological development is good, realizing it is not a big challenge. "In the future, through Apollo, Baidu can sell high-precision maps, sell simulation platforms, and even sell computing hardware ACU, which are very direct and very needed services," he said.

In January of this year, Baidu said that it would sell a series of hardware in the future, which can be plugged into the car to run their software and realize the automatic driving function. This hardware is the ACU (Apollo Computing Unit) that Li Yanhong refers to. In addition, Baidu has some hard-and-soft solutions, such as valet parking solutions, which is also a way of realizing.

But Baidu seems to be a bit too hasty in the process of building the Apollo ecosystem. According to the 36-inch report, after the implementation of Baidu's free open-drive Apollo program, there is still a KPI that must be completed every month with a certain number of partners. Under such a request, "partial Apollo's external cooperation flows on the surface."

In the second quarter of 2018, Baidu highlighted the DuerOS development platform. This is the only AI application ecosystem platform in China that covers everything from hardware to framework to platform, development ecology, ecological application system and terminal hardware. This year, DuerOS has been upgraded to 3.0, and it has a wake-up function through voice recognition technology, which can be installed in smart devices such as smart speakers.

After the launch of DuerOS in 2015, the industry is already the Red Sea for speech recognition, and every company wants to sell its own operating system. The DuerOS card was not highly valued by the top management in the competition with Alibaba Cloud and Keda Xunfei. After Lu Qi took office, he quickly upgraded the secret business unit to a business group, and began the process of seeking business breakthroughs and seizing the market.

The development of DuerOS can be described as twists and turns.

In 2018, Baidu World Congress, Baidu Smart Life Group General Manager Jing Hao announced that DuerOS is the number one in the industry. Behind this, Baidu invested a lot of money in DuerOS. In order to expand the number of DuerOS terminals, Baidu invested in screen TV and rice speaker technology at home. In order to enrich the content of DuerOS, Baidu continued to invest in Baidu video, vertical and horizontal literature, 蜻蜓FM, pear video and everyone video. the company.

This also directly leads to an increase in the cost of content. From the latest Q3 earnings report released by Baidu, Baidu’s content costs have also risen. In the Q3 quarter, Baidu's content cost was 6.7 billion yuan, a year-on-year growth rate of 73%, a further increase from Q2's 68%.

"Our hardware may be the most subsidized in the industry. At present, commercialization is not considered. It is too early, and it needs to be 1-2 years." Jing Hao said in an interview.

In 2017, the giants saw the potential of smart speakers as a smart home entrance, and Ali,JingdongXiaomi and others launched a round of subsidy wars, and the price of speakers continued to drop. In the Red Sea, Baidu's original plan is to combine the advantages of technology and take the high-end route of differentiation. In February 2017, Baidu acquired Raven Technology and began to enter the smart speaker market. In November of the same year, Baidu released the first smart speaker Raven H, the price of 1699 yuan. However, Chinese users do not currently have a need for smart speakers. In the big industry with an average price of less than 500 yuan, not many people buy Baidu.

Since then, Baidu has changed its strategy and joined the price war. In March, Baidu and Xiaoyu jointly built a smart speaker with screen at home, the price dropped to 599 yuan, and then further reduced the price. In June, Baidu released a smart speaker with a price of 249 yuan and a taste price of 89 yuan.

"We are not selling smart speakers, we are looking for the entrance to the loT layout, so there is no profit pressure at this stage." Jingkun mentions all-weather technology.

According to Canalys data, in the third quarter, Baidu smart speakers shipped 1 million units, an increase of 711% annually, the fastest growth among all manufacturers. Now it has surpassed Jingdong and ranked among the top three in China's smart speaker market.

So far, Baidu has made a significant breakthrough in intelligent hardware, which is of great significance to Baidu. Baidu used to rely more on software systems such as DuerOS to support hardware manufacturers, but now it can also occupy a place in the hardware market.

While Baidu vigorously publicizes the prospects of AI to the outside world, the information flow business in Luqi's "main channel" has gradually improved.

Information flow has become the "darling" of the mobile Internet era. According to the data released earlier by Erie Consulting, the size of the information flow advertising market will exceed 140 billion by 2019. Baidu naturally wants a piece of it.

In 2017, Baidu started its information flow business, and said that it has accumulated 10 billion yuan to content producers. All individual and institutional content producers can be stationed in 100 companies to participate in the sharing. So far, Baidu has joined the content support battle to compete for information flow and advertising market.

Since then, information flow business has also maintained rapid growth. By Q2 in 2017, the advertising revenue of information flow has also risen rapidly from 10 million per day in Q1 quarter to 30 million per day. In 2017, the revenue of information flow business will exceed $1 billion.

Baidu App is the most important carrier of Baidu's content and service ecology. It aggregates good-looking videos, national videos and Baijia numbers, and recently launched small programs to further grab traffic.

According to the latest data, Baidu App has 160 million active users, more than 6 billion search responses per day, and 15 billion recommendations per day. The usage time of information flow products increased by 68% over the same period last year.

In the three quarter of 2018 earnings call conference, Robin Li said that information flow advertising and search advertising have brought considerable returns to advertisers. "By contrast, information flow advertising is more sensitive to budget adjustments, because a large proportion of information flow advertising is brand-related. Besides, information flow ads tend to increase faster than search advertisements, "Robin Li said.

It can be said that compared with AI business, the effect of information flow is more immediate. This is due to the good foundation of search business and the ability of AI big data.

"There is a flow of revenue, Baidu information flow has been distributed tens of billions of day, cutting advertising traffic is also a hundred million exposure level." A Baidu content manager mentioned.

Baidu is trying to change users'habits with information flow. In the PC era, users go everywhere through Baidu search engine, but now, Baidu wants users to come in through search demand and remain in Baidu App. To retain users, Baidu App's strategy is to rely on small programs to provide services, relying on hundreds of pictures and text, national video, good-looking video, live broadcast, paste bar, dynamic novel and other content.

On the other hand, investment in AI is increasing. After Luqi left, Baidu continued to invest heavily in artificial intelligence, with annual R&D expenditure exceeding 10 billion yuan.

Baidu management said in a conference call after Q3 financial report that AI business and information flow business revenue has exceeded 20% of the total revenue. In the second quarter earnings report, AI business and "other business" revenue together, the total amount is not more than 10%.

At least in several earnings reports released in the past year, Baidu did not disclose AI's specific revenue, only mentioning technological breakthroughs and innovations. Although Baidu mentioned in the conference call that in 2019 AI and related business revenue will reach more than 30% of the total revenue, this data has not yet been written into financial reports or other public documents.

Despite the high investment and low revenue at this stage, Baidu has finally seen some gains on the AI front.

The development of To B business line through AI depends on the final landing and profitability. This year, Tencent, Ali and other giants have entered the market, together with many unicorns in the AI field, Baidu AI's final results, which started earlier, still need time to test.

But investors seem to have lost patience. From Baidu's overall market trend, the investment of AI business has affected Baidu's market value.

"If we cut down more than 10 billion yuan of AI investment a year, Baidu's market value can rise by 30% - 50%. A long-term concern for U.S. stocks investors mentioned.

"Baidu's core competitiveness or advertising marketing, artificial intelligence and cloud business brought about by the big data advantage, will be able to attach advertising in the future." "But this help is not proportional to the huge investment," said the investor.

An example worth learning is byte bouncing. In October, headline parent company byte bouncing announced $4 billion in pre-IPO financing, valued at $75 billion. This valuation has exceeded Baidu's current market value. Since its inception in 2012, byte bouncing has been around the information flow advertising business such as layout, from the headline App of today's information class, to the tremble of short video class, watermelon video and so on. It took only five years to complete the traffic harvesting, and grew into a super unicorn and vigorous traffic platform. According to the latest data of Hengda researchers, information flow advertising can bring nearly 50 billion yuan in revenue to the headlines.

As early as the May 2017 Baidu alliance conference, Robin Li redefined Baidu. He said Baidu would no longer be a Internet Co, but an artificial Intelligent Company. But today, Baidu's revenue, search and information flow advertising, a typical Internet product, still dominates.

At the Baidu World Conference, Robin Li raised a question at the end of his speech. Would AI make the world a better place? Baidu's answer is, "Yes, AI do."

However, at present, AI has not made Baidu's market value better. Next step, is Baidu choosing between the AI business of to B and the search and information flow business, dividing the primary and secondary business, or trying to balance the two and move forward synchronously? Reality will give Baidu the answer.

Author | Ma Cheng Editor | Luo Lijuan

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