In the fierce battle of AI, which BAT can overtake others?

After nearly 20 years of development, the three largest Internet giants in China, BAT (Baidu, Alibaba, Tencent), have undergone dramatic changes in size and main business. Baidu experienced huge twists and turns in 2016. From the Tieba incident to the Wei Zexi incident, from the adjustment of Baidu's medical division to the "four great kings leaving", Baidu's development has slowed down. Alibaba and Tencent have tried to diversify their profits, and their revenues have both reached 150 billion yuan. In particular, Baidu's profit in the past year was less than Alibaba's profit in one quarter. Baidu is no longer on the same level as the other two.

It is worth noting that Tencent's advertising revenue has soared and has gradually penetrated into Baidu's home turf. Facing the future, Baidu, which lost its leading position in the mobile Internet and experienced trial and error in O2O, has firmly chosen the artificial intelligence route to overtake others. However, facing Alibaba and Tencent, which are waiting for an opportunity and have more user data and application scenarios, it is still unknown whether Baidu can achieve the final counterattack.

Tencent's advertising grew but gaming growth slowed

Tencent's advertising revenue has grown rapidly, reaching 26.9 billion yuan in 2016. However, the growth rate of its pillar business, gaming, has hit a new low since its listing.

With Tencent's recent release of its 2016 financial report, BAT's annual reports have all been released. Last year, Tencent's revenue was 151.938 billion yuan, up 48% year-on-year. Alibaba's revenue reached 143.878 billion yuan, on par with Tencent. Baidu's revenue in 2016 was 70.549 billion yuan.

In 2015, Tencent just broke through the 100 billion yuan revenue mark, Alibaba stopped at 94.3 billion yuan, and Baidu's revenue was 64.3 billion yuan. In 2014, Alibaba's revenue was 52.5 billion yuan, Tencent's was 78.9 billion yuan, and Baidu's was close to 50 billion yuan. The three are still at the same level.

In 2001, when Robin Li proposed to develop search engines and paid ranking services, he was strongly opposed by the board members, but Robin Li insisted. It was precisely because of his persistence 16 years ago that Baidu Search was built from scratch and became the largest search engine in the Chinese world.

Paid ranking is a profit model proposed by Li Yanhong and his wife Ma Dongmin when they were shopping. The emergence of paid ranking has provided a channel for monetization of the free Internet model.

Baidu's online revenue in fiscal year 2016 was 64.525 billion yuan, 2.4 times that of Tencent's online advertising.

However, Baidu has approximately 982,000 active online marketing customers, down 6.4% from fiscal year 2015, and the average revenue from each online marketing customer is approximately RMB 65,300 (approximately USD 9,405), up 7.9% from fiscal year 2015. This means that Baidu's online marketing revenue customers declined in 2016, but the average customer price increased.

In 2016, Tencent's online advertising business had a full-year revenue of 26.87 billion yuan, a year-on-year increase of 54%. For Tencent, the advertising business has become increasingly important.

In the fourth quarter of 2016, Tencent's online advertising revenue increased by 45% year-on-year to 8.288 billion yuan, mainly driven by the growth in advertising revenue from WeChat Moments, Tencent's mobile news applications and WeChat public accounts.

Independent IT analyst Tang Xin believes that the decline in Baidu's advertising revenue is mainly due to the rise of mobile terminals. Baidu's media layout on mobile terminals is relatively limited. Insufficient media resources have led to the decline. At present, Baidu does not have any particularly promising media products on the mobile terminal, and it is unlikely to reverse the decline in the short term.

The reason for Tencent's sudden rise in advertising revenue is that it has better integrated media resources. With the gradual improvement of platforms such as Guangdiantong, media resources have been gradually released and optimized, and data has been continuously accumulated, allowing Tencent's advertising revenue to grow rapidly.

However, Tencent also has its own concerns. The main pillar of its performance is still games. Last year, its game revenue reached 70.8 billion yuan, accounting for 46.6% of its total revenue.

It is worth noting that in the fourth quarter of last year, the year-on-year growth rate of Tencent's gaming business had dropped to 16%, setting a new low since its listing. And this is a signal revealed by the hot sales of its flagship game "Honor of Kings". Whether the game can continue to support Tencent's rapid revenue growth is worth paying attention to.

AT leads in mobile competition

On the mobile side, the competition among the three giants BAT has never stopped.

According to the financial report, in December 2016, the number of monthly active users (MAU) of Baidu Mobile Search was 665 million, a year-on-year increase of 2%; the number of monthly active users of Baidu Mobile Map was 341 million, a year-on-year increase of 13%; the number of activated Baidu Wallet accounts reached 100 million, a year-on-year increase of 88%.

However, compared with national-level applications such as WeChat, Baidu still has a long way to go. As of the end of 2016, WeChat's combined monthly active users reached 889 million, a year-on-year increase of 27.6%.

Alibaba has leveraged its own advantages to make huge profits in the competition for mobile shopping.

Alibaba's financial report stated that as of December 31, 2016, the number of mobile monthly active users of China's retail platform increased to 493 million, a net increase of 43 million from 450 million in the previous quarter. In the fourth quarter of 2016, the mobile revenue of China's retail platform was 32.451 billion yuan, a year-on-year increase of 73%; mobile accounted for 80% of the total revenue of China's retail platform, compared with only 65% ​​in the same period of 2015.

Baidu is currently lagging behind AT in terms of both the number of users and growth momentum. Tang Xin believes that Baidu search has reached the ceiling of the industry, and with the decline in PC search volume, both Baidu and other search engines will face growth difficulties.

In the offline consumption field, Baidu is also unable to compete with the other two giants. WeChat has accumulated funds from social networking and has a great advantage in offline payment. Although Alibaba has adopted many measures, such as social circles and Ant Forest, the results are not very good.

However, the joint venture between Alibaba and Ant Financial, Koubei, which provides local life services, settled transactions through Alipay amounting to 73.1 billion yuan, up 52% ​​from the previous quarter. In the future, Ali's Alipay will continue to develop scenarios from the top down at the enterprise and merchant level, while Tencent will develop scenarios from the bottom up at the user level. The competition between the two sides will continue for a long time and there will be no winner.

Can artificial intelligence help Baidu make a comeback?

It remains to be seen whether Baidu can break through in the field of artificial intelligence.

From the perspective of revenue, Tencent has the highest revenue. In 2016, Tencent's revenue increased by 48% year-on-year to RMB 151.9 billion.

Alibaba became the most profitable company, with profits reaching 68.1 billion yuan in 2016, surpassing BAT.

In comparison with AT, Baidu's revenue in 2016 was RMB 70.549 billion, 46% of Tencent's; its net profit was RMB 11.632 billion, only one-sixth of Alibaba's. In terms of revenue and profit, Baidu has fallen behind.

Baidu experienced a lot of turmoil in 2016. Can artificial intelligence, which is what Robin Li values ​​most, help Baidu make a comeback and rewrite the landscape of the competition among the three giants BAT?

In his financial report, Robin Li reiterated Baidu's high hopes for artificial intelligence. "Artificial intelligence will be a huge opportunity, bringing revolutionary changes to the Internet and traditional industries. Baidu has unique technical genes, big data advantages and talents." Baidu Chairman and CEO Robin Li said, "Our existing platform products, including search engines and information flows, have been optimized and upgraded through the application of artificial intelligence technology, and have been further enriched by our content and service ecosystem."

One of Baidu's entry points into artificial intelligence is through search. With its dominant position in search ranking, it will have a large number of user portals and data. But the problem is that compared with the diversified profitable businesses of Tencent and Alibaba, Baidu has always relied on search advertising as its main source of income. And Baidu's senior executives in the field of autonomous driving, Andrew Ng and Wang Jin, have recently resigned. It is still unknown how Lu Qi from Silicon Valley will lead Baidu to break through in the field of artificial intelligence.

Compared with Baidu's advance storage of artificial intelligence talents in batches, AT's layout in artificial intelligence focuses more on the application level. Recently, there has been a trend in the industry for BAT to "poach" artificial intelligence talents.

Tencent announced in March that it had hired Zhang Tong, the former head of Baidu's Big Data Lab, to manage its artificial intelligence (AI) projects. After joining Tencent, Zhang Tong will serve as the director of Tencent AI Lab, leading a team of 250 researchers and engineers to focus on artificial intelligence research, including four vertical fields: computer vision, speech recognition, natural language processing and machine learning.

Alibaba also went head-on with Baidu in 2016, and launched Xiao Ai, which successfully predicted the results of "I Am a Singer" and ranked first in the world in terms of accuracy in text recognition. On March 9, 2017, at the Alibaba Technology Summit, Alibaba launched the "NASA" plan to build a strong independent R&D department for the next 20 years. Jack Ma also named five major technologies: machine learning, chips, IoT, operating systems, and biometrics.

After experiencing trial and error in O2O and other fields, Baidu, which is in crisis, firmly chose the artificial intelligence route to overtake others. However, facing Alibaba and Tencent, which have more user data and application scenarios, it will take some time for Baidu to reap the fruits of artificial intelligence. From the current perspective, Baidu's counterattack will take more time.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.