Baidu, the Chinese search engine, has been facing steady competition from their rivals, causing over $60B of the company’s value to be eliminated since 2018.Tencent, Alibaba, and Baidu are China’s big Internet Trio. However, Baidu has been losing in a highly competitive advertising market, forcing it to fall behind compared to the other 2 rivals. Called China’s Google, the company’s shares have fallen over 40% during this year alone. Compared to this, Tencent’s shares are up 6% and Alibaba’s shares have risen 27% compared to last year.
Back in May 2018, the company maxed out at $99B, with each share at $284. Baidu’s shares have been reduced to around $96.7 per share, with the market cap falling to $33.8B. In contrast, Alibaba and Tencent are worth more than $400B individually. Analysts are predicting more problems for Baidu ahead of the company’s Q2 report. Wall Street analysts predict its revenue to hit $3.66B, which is around 0.8% lower than last year’s figure. EPS is expected to be at 2.91 yuan, which is around 83% lower than last year’s figure. Baidu has been the dominant search engine in China ever since Google’s exit in 2010.However, Baidu failed to modify itself in accordance with the mobile revolution and is facing competition from entrants like ByteDance. Advertisers are now going for other platforms. Xueru Zhang of 86Research stated that this structural change was unfavorable for Baidu’s search engine business.
China has also seen the emergence of super apps. Super apps include products like Alipay from Ant Financial or WeChat from Tencent, where users can perform many activities, from shopping payments to food orders, all via one app. Baidu’s been pouring money into its mobile product. It has its own app, where its users can watch and search for videos along with other activities. The app’s DAU metric has crossed 200M.Baidu has also been switching its focus to AI. Analysts believe that Baidu’s AI businesses are capable of being a long-run value driver.
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