# How does Baidu save itself? By [HoloBase](https://paragraph.com/@holobase) · 2022-02-10 --- When will Baidu return to its market highs? This is a matter of great concern to the entire Internet circle.   In the past few years, the Internet circle has witnessed the decline of Baidu's market value. Nowadays, Baidu, which has a 20-year history, has a market value lower than that of a 9-year-old Zoom with little profit. After missing the opportunities of O2O and mobile Internet, Baidu is now at a critical intersection for drastic reforms.   In the first half of this year, Baidu made some new moves to try to get back on track, such as live broadcasting, resurrection of local life, and opening of Apollo Robotaxi self-driving taxi service. Robin Li, the CEO and cofounder of Baidu, is also leading Baidu to transform the relationship between user, information and services. Meanwhile, Baidu is also looking forward to forming a closed loop of "expressing demand - discovering information - completing service".   The transformation of Baidu is not only for launching innovative products, but more importantly, diversified services mean that the user's usage time increases. That is to say, there will be more possibilities for Baidu to make profits.   Of course, this is just a move for Baidu to return to its value position. What's more, Baidu is now facing a huge talent gap. How to fill the gap and retain talent, it may be a problem that Baidu needs to think deeply. **From information to service**   Baidu's strategy is to release new products and services step by step in oder to rebuild its value. Baidu Hi was released to the public in February. On April 27, Baidu Hi was officially renamed "InFoflow". While maintaining the existing functions, it also added some new functions, such as supporting 520 people online conferences and automatic translations, which seems to compete with Dingtalk, Tencent Conference, Feishu(Lark), and Huawei Welink.   However, these have hardly caused any splash, which is far less than the heat brought by Robin Li's live broadcast.   On May 15, Robin Li opened the first live broadcast in his life. This live broadcast of more than one hour had 9.26 million viewers watching online, which also made Baidu's market value soared by $1.7 billion overnight. Robin Li's action is enough to show that Baidu attaches great importance to the live broadcast business. In fact, the live broadcast also embodies one of the development directions of Baidu's mobile ecosystem in the second half of this year - user and service.   In the past, Baidu has been connecting users and information, but this connection is extremely fragile. After users search for information in Baidu, they can transfer to other platforms, which leads to extremely limited time for users to stay in Baidu.   Therefore, connecting user and service has become a key for Baidu this year. More than just live broadcasting, Baidu has recently resurrected its "local life" business. The Baidu service center covers 9 fixed entrances and 3 sections of convenient life. Currently, users need to enter "Baidu Live" and "Service Center" in the Baidu App search box to enter related channels.   Unlike the previous one, Baidu did not set up a team to recruit merchants to settle in. It adopted a more "trick" approach - Baidu united with vertical travel platforms such as Qunar, Ctrip, iQiyi … platforms to connect to the first-level entrance of the service center.   The general direction of Baidu's strategy is also concentrated in the OKR of Shen Dou, executive vice president. It is reported that the OKR includes: maintaining a leading position on existing tracks such as search and information flow, making breakthroughs in innovative tracks such as health services, and more innovative products in connecting user and information.   **Improve the ability to make profits**   Baidu's purpose is clear that is to make money. In the second quarter of 2019, Baidu saw a 940 million yuan operating loss and gross profit fell below 10 billion yuan. In the next three quarters, Baidu increased its gross profit by vigorously compressing market and administrative expenses. But throttling is always inferior to open source.   Compared with Tencent and Alibaba, Baidu has the most simple revenue structure. At its peak, its search revenue accounted for more than 90% of its advertising revenue. In the latest quarter, the advertising revenue from the search business and iQiyi also accounted for 63% of revenue.   Behind the unitary structure of revenue, Baidu has so far failed to come up with sufficiently competitive new products.   During the Spring Festival this year, the short video app [Kuaishou](https://www.holobase.io/company/5badffc8df68ad00012775b4) teamed up with CCTV's Spring Festival Gala to celebrate the festival. At the same time, during the epidemic, ByteDance spent 630 million yuan to buy the copyright of the movie "Lost in Russia". The downloads and DAU of both parties have been greatly improved, but Baidu does not seem to capture the dividends of stay-at-home economy. According to Trustdata data, in February 2020, the MAU of Douyin increased by 7.52% month-on-month, and that of Kuaishou rose by 3.15%, while that of Haokan video dropped by 1.16%.    Therefore, search business has become the main revenue source for Baidu.   In the past year, Baidu first cooperated with Youzan to launch e-commerce services, and then launched the service center section on the App. At the same time, it launched live broadcast services, all from connecting user and information to connecting user and service. For these services, Baidu may import part of the traffic for related applications to improve its monetization ability.   Today, when the advertising business is constantly being eroded by Toutiao, Baidu is fighting back as much as possible, but it seems that this is still not a long-term layout.  AI is the track that Baidu has been betting on for the past few years. Since the second quarter of last year, Baidu has been vigorously compressing administrative and market expenses, but it is still generous about R&D expenditures. For example, in Q1 2018, Baidu's R&D investment was 3.3 billion yuan, accounting for 15.8% of revenue, equivalent to 30% of gross profit; in Q1 2020, Baidu's R&D investment was 4.4 billion, accounting for 19.7% of revenue, equivalent to 56% of gross profit. Baidu's AI business can be divided into three major blocks: DuerOS, Apollo and Baidu Smart Cloud. No matter which sector requires long-term continuous investment, AI is also considered by most people in the industry to be the key to Baidu's return to the peak again.   Therefore, AI also shoulders the burden to promote revenue growth. After the 2020 financial report was released, CFO Yu Zhengjun said in the Baidu earnings conference call that AI's focus is to achieve growth in revenue while increasing growth. Baidu's Smart Cloud is more responsible for revenue pressure.   Tech Planet (ID:tech618) has previously reported that Baidu Cloud's 2020 OKR added profit indicators, and gross profit is the first assessment factor. "Robin (Li Yanhong)'s OKR requires Baidu Cloud to be a little bit: turning losses into profits, with a gross profit of at least 20%."   Less than 5 years after entering the game, Baidu Smart Cloud began to cash out in a hurry. This is enough to show the pressure on Wall Street capital market to Baidu. **Baidu worries about brain drain**   There is no doubt that Baidu is anxious. This anxiety is not only reflected in performance, but also in the loss of talent.   On the afternoon of April 7, 2020, the day before the announcement of the request for rectification of the Baidu App, all employees of the company received an appointment email for this year's middle and senior management. The number of appointments is the highest in history. There are 54 people above the director level who are promoted in the list, while the total number of directors at Baidu is only more than 100.   Baidu seems to be consciously relaxing the promotion standards. According to informed sources to Tech Planet (ID: tech618), Baidu has now added a lot of titles, such as executive vice president. At the same time, the standard of VP is being lowered. Previously, only M4B could be called VP, and now M4A can too.   In the Baidu management sequence, M5 is the highest level, followed by M4. The series is further divided into three levels:M4A, M4B, and M4C. According to previous standards, M4B is a vice president level and is mostly a core member of Estaff, such as Cui Shanshan, while M4A is only a vice president level, such as Jing Kun, general manager of the life business group, Li Zhenyu, general manager of the intelligent driving business group, etc., M4 is mostly the executive director, which is also the main part of this promotion.   The first person in the promotion sequence was Zhou Huan. He joined Baidu in November 2016 and served as the senior director of the Group Strategic Planning Management Department (later changed to the Group Strategy Department) and the senior director of the Group Strategic Investment Management Department. The Group Strategy Department was responsible for Ma Dongmin.   In April 2019, Zhou Huan took turns to the mobile ecological business group and served as the head of the strategic development center, responsible for the strategic planning, business operation management, data center and other aspects of the mobile ecological business group. In April 2020, Zhou Huan was promoted to vice president of Baidu. This also means that Zhou Huan's time on the front line of business is relatively short.   Secondly, the promotion of the two heads of Baidu's mobile ecological user growth department, the head of the interactive entertainment platform Cao Xiaodong, and the head of Baidu App business Ping Xiaoli have also been questioned internally.    This adjustment is enough to see that Baidu is extremely hungry for talent.   It is reported that since the departure of Baidu's senior vice president Xiang Hailong last year, there has been a fault in the middle of Baidu. Almost 20 directors have left, accounting for about 20% of Baidu's director level.   This is not a new problem. From the end of 2017 to the beginning of 2018, the problem of talents broke out intensively. An old employee who has worked at Baidu for 10 years once told Tech Planet (ID: tech618) that Baidu had 13 P9s, but during that time, five were removed at once. Baidu's P8 is rare. For Baidu maps with more than 2,000 employees, there is only one P8 and one P9. Among the knowledge products of Baidu Jingyan, Baidu Wenku, and Baidu Reading, the highest level is P7, which means that basically talents above P7 have faults.    While large-scale promotion at the middle and high levels, the standards for promotion at the grass-roots level were adjusted to be stricter. A Baidu employee told Tech Planet (ID: tech618) that Baidu had two opportunities for promotion in Spring and Autumn, but now it has become one time. To put it bluntly, only special people can get a promotion in Autumn.   Baidu's emphasis on the talents is obvious. To take a step back, any large company that wants to continue to develop healthily needs not only the correct top-level decision, but also the middle-level struggling on the front line. In turn, the large-scale loss of the middle-level seems to mean that its decision-making on the top level lack of confidence.   This is a problem faced by all large companies, but fortunately Baidu is making efforts to retain talent and innovate products, and in the future, whether Baidu can return to its peak, it will take time to test. This is an article from WeChat official accounts [Tech Planet](https://mp.weixin.qq.com/s/SFeRjbefe95Vj-oCmE1Ziw) (ID: tech618), written by Hong Hong, translated by Chris Yuan. --- *Originally published on [HoloBase](https://paragraph.com/@holobase/how-does-baidu-save-itself)*