On the evening of November 21st, Baidu disclosed its financial report for the third quarter of 2023. According to announcement data, Baidu recorded a revenue of 34.447 billion yuan in the third quarter, a year-on-year increase of 6%; Under Non GAAP, the net profit attributable to Baidu reached 7.3 billion yuan, a year-on-year increase of 23%.
After excluding the 8 billion yuan revenue brought by iQiyi, Baidu's core revenue was 26.6 billion yuan, an increase of 5% year-on-year. Among them, online marketing revenue was 19.7 billion yuan, a year-on-year increase of 5%, which is basically equivalent to the growth of the internet advertising market; The revenue from non online marketing was 6.9 billion yuan, a year-on-year increase of 6%.
AI remains undoubtedly the development focus of Baidu. Robin Lee, the founder and CEO of Baidu, pointed out in the financial report that Baidu adheres to the business and product strategy with AI as the core, laying the foundation for the revenue maintenance and profit expansion of ERNIE Bot Model and Wenxin Yiyan Ecology in the coming years.
On October 17, Baidu released version 4.0 of Wenxin Big Model, which Robin Lee called the most powerful Wenxin Big Model so far, and "its comprehensive ability is no inferior to GPT-4". Then, at the beginning of November, ERNIE Bot officially opened professional membership services, making Baidu the first large model enterprise in China to charge for the C end through membership mode.
According to Baidu, at present, ERNIE Bot has 70 million users, covering 4300 scenarios. On the B-end market, Wenxin 4.0 is also open to enterprises through the Baidu AI Cloud Qianfan model platform. At present, the platform serves more than 20000 enterprises, covering nearly 500 scenarios.
In addition to the development of technology itself, AI is also restructuring Baidu. Baidu has launched multiple native AI applications, including Baidu New Search, Baidu New Library, and Baidu Netdisk "Yunyiduo". Among them, the number of users of Baidu's "Cloud Yiduo" online drive reached 20 million; Baidu Wenku's AI new features have accumulated over 30 million users.
But in contrast, the market is more focused on changes that can bring immediate benefits. A few days ago, Tencent released its third quarter financial report and revealed that with the help of video accounts and big models, its advertising revenue recorded a 20% year-on-year growth in the third quarter. Therefore, investors are asking how AI will transform Baidu's advertising business.
In response, Robin Lee pointed out that Baidu is reconstructing its advertising system with Wenxin model, and has made some breakthroughs in creative generation, advertising positioning, and bidding methods. These measures are expected to bring hundreds of millions of yuan in incremental revenue in the fourth quarter.
Another focus of market attention is the changes in Baidu's board of directors. At the same time as disclosing financial data, Baidu pointed out that the company had appointed JD CEO Xu Ran as an independent director of the company, effective from January 1, 2024.
Just a few days ago, Xu Ran received much attention for concurrently serving as the CEO of JD Retail. According to public sources, Xu Ran joined JD.com in 2018 and held various positions such as department heads and CFO for group finance and taxation. He led the team to complete JD.com's mergers and acquisitions of listed companies such as Dada, Debang, and China Logistics Real Estate, as well as JD Technology's business restructuring.
In May, Xu Ran succeeded Xu Lei as the CEO of JD Group, and six months later, he also served as the CEO of JD Retail. From then on, Xu Ran not only coordinated the overall situation of JD in the rear, but also directly led the team to charge the frontline. This is a state that Xu Lei, the previous CEO of JD Group, has never experienced, and Xu Ran is jokingly referred to as the "burden bearer" of JD.
As of the time of publication, Baidu has not responded to any further considerations regarding Xu Ran's entry into the bureau.
Zhang Xiaorong, President of the Deep Science and Technology Research Institute, told Times Financial Analysis that Xu Ran, as the CEO of JD.com, has a deep understanding and insight into the e-commerce industry. Baidu may hope to draw on her experience and wisdom in the e-commerce field to further promote the development of Baidu's e-commerce business.
There are early signs of this matter. At the 2023 Vientiane Baidu Mobile Ecology Conference held on May 25th, Baidu launched a new intelligent e-commerce brand called "Baidu Selection", focusing on AI shopping assistants, as well as intelligent marketing tools such as digital live streaming, intelligent marketing, and intelligent customer service, hoping to reshape its e-commerce business with artificial intelligence.
To this end, Baidu E-commerce has also released a super ecological plan, announcing that it will help create 1000 million GMV popular products, 100 merchants with annual sales exceeding 100 million, and 15 service providers with GMV exceeding 100 million.
Robin Lee also stressed at the performance exchange meeting after the release of the financial report that Baidu, like other Internet platforms, is building its own native e-commerce business. With the continuous improvement of the shopping experience, Baidu's e-commerce business is expected to record strong growth.
This year's Double Eleven, Baidu e-commerce, which collaborates with AI big models, has achieved preliminary results. According to relevant data, during the Double Eleven period, Baidu Youxuan's live streaming GMV increased by 740% year-on-year, and the total GMV increased by 300% year-on-year, doubling. During the event, the number of closed-loop trading users increased by 420% year-on-year.
The problem is that since 2007, this old internet powerhouse has repeatedly jumped in the e-commerce business. From the beginning of Baidu Youah, to the subsequent joint venture with Japanese e-commerce giant Lotte, as well as Baidu WeChat, Baidu Shopping, and Du Xiaodian, Baidu has repeatedly made high-profile attempts to enter e-commerce, but has failed to achieve its desired results.
Whether AI can reconstruct Baidu's e-commerce remains to be tested by the market. On the day of the financial report, Baidu's stock price rose 1.91% to $113.42 per share, with a market value of $744 million, equivalent to approximately 5.3 billion yuan.