Market Research Report
Webscale Playbook - Baidu: R&D Binge to Continue as Baidu Banks on Long-Term Bets in AI and Autonomous Vehicles for Competitive Edge
|Published by||MTN Consulting, LLC||Product code||756468|
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|Webscale Playbook - Baidu: R&D Binge to Continue as Baidu Banks on Long-Term Bets in AI and Autonomous Vehicles for Competitive Edge|
|Published: December 14, 2018||Content info:||
Baidu, often referred to as “China's Google”, is embarking on a new journey to pursue growth outside its core search and advertising business. That's vital as the online advertising business is maturing, yet Baidu continues to rely heavily on it (80% of 2017 revenues). Adding to the woes is the increased rivalry from local peers, Alibaba and Tencent, in the core advertising and online content segments, tied with macro-economic risks arising from rigid ad-related policies/regulations and US-China trade war. These factors have thumped Baidu's 4Q18 topline guidance. Fortunately, Baidu realizes its position, and is already channeling greater focus on newer sustainable markets that include AI (DuerOS-powered smart devices, smart cities, blockchain) and autonomous vehicles (“Apollo” program, driverless vehicles). The company is also on a non-core divestiture spree aimed at freeing up money and resources for these newer markets. As Baidu builds its portfolio of new markets, the company's R&D outlays have held steady at around 15% of revenues since 2015.