Analysys Insight:
In 2016 Q3, China’s search engine carrier market hit RMB21.14 billion, up 0.7% quarter on quarter or 0.5% year on year, shows the Monitoring Report on China’s Search Engine Market 2016 Q3 recently published by Analysys.
The search engine carrier market stopped growing, mainly because the government strengthened the regulation of the advertising market and the Interim Measures Regarding the Administration of Internet Advertising was formally implemented as of September 1, 2016. Search engine carriers started removing illegal advertisements, which reduced the revenue. However, the market will still embody a significant growth space in certain future period. Search engines are still an important flow entry and will further display their commercial values as search engine carriers deepen the connection with various vertical areas. For another, search engines are still one of the channels with the greatest marketing values, as the keyword advertising has a higher conversion effect than most of channels. Therefore, marketing expenses will create a considerable return and advertisers will spend more on advertisements, which will drive the market expansion. At the same time, a healthy business environment will inject new vitality into the industry after search engines experienced “labor pains”.
In 2016 Q3, Baidu took a market share of 80.02%, followed by Google China with 10.81%, Sogou with 5.75% and others with 3.42% in terms of revenues excluding the channel revenue.
In 2016 Q3, Baidu took a market share of 76.49%, followed by Google China with 10.33%, Sogou with 8.15% and others with 5.03% in terms of revenues including the channel revenue and overseas revenue.
In 2016 Q3, Baidu took a market share of 84.44%, followed by Sogou with 6.39%, Google China with 5.4% and others with 3.77% in terms of revenues excluding the channel revenue and overseas revenue.
The traditional search engine market was already saturated, and the development stage of the market simply depending on the demographic dividend already ended. The search engine market changed from the “quantitative change” dependent on the user base expansion to the “qualitative change” stressing user experience. To this end, domestic and overseas search engine giants all targeted artificial intelligence and drove search innovation with respective technical reserves and resource advantages.
In 2016 Q3, Baidu opened an in-depth learning platform PaddlePaddle to provide an in-depth learning framework with comprehensive functions for program developers. While providing information and services, search engines widely applied search, image identification, voice identification, natural language processing and other technologies, so they have accumulated rich data and technologies and forged certain advantages in the area of artificial intelligence. At the same time, search engines no longer acted as information service providers but penetrated into service, consumption and other scenarios. Life scenarios connecting online and offline needs of users create the need to understand user needs in a more intelligent manner, so artificial intelligence will be the technology that will enable search engine carriers to build a big search ecosystem.
Also eyeing artificial intelligence, Google launched the RankBrain artificial intelligence algorithm to strengthen intelligent understanding of meanings of users’ search strings. At present, the artificial intelligence concept is emerging as a consensus in the search area, but machine understanding of rare searches and users’ linguistic expressions still deviates a lot. The key for search technologies to truly go intelligence is the precise understanding of what users think. Thus, the innovation of intelligence algorithms will be the inevitable way for search engines to directly serve users and optimize the user experience.
With the long-term accumulation in image identification and voice identification, Sogou has further strengthened the application of artificial intelligence technologies. In 2016 Q3, it launched the “tongue diagnosis”, “picture shopping”, “voice coffee reservation” and other new functions. At present, the artificial intelligence technology remains at the startup stage, but its application in the vertical area will convert information into online and offline services, and search engines will extend their values of life services under vertical scenarios. At the same time, search engines will connect vertical life service scenarios through artificial intelligence, build a closed loop of data application and further strengthen the technical capacity.
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