Baidu has dominated China’s search market for too long. Especially after Google left the market in 2010. However, ByteDance may challenge Baidu. ByteDance is one of the most valuable world’s startup. It is worth $75 billion.
Yet, many predict that ByteDance will not likely launch a standalone search engine. On the other hand, they will integrate that function into its current existing products. As the starter, it will test the new function with its news aggregation app, Toutiao.
The application installed on over 250 million monthly unique devices. Comparatively, TikTok has 500 million monthly active users. That big number of users make analysts think ByteDance may challenge Baidu.
Besides the huge install base, ByteDance is seeking to build a search engine specifically for mobile. The idea is better than Baidu which built a desktop product, then transitioned to mobile.
Baidu Weakness
Baidu has been criticized for its slow transition to mobile. However, it launched a standalone app. The app has a feed video, news, and search engine. The Baidu app has 174 million daily active users. Similar to its competitors, Baidu is also dealing with a slow search advertising market.
Many experts expect the growth to be 11.6% this year compared to 12.4% last year. Moreover, that they also expect the growth to slow to 9.7% in 2020. Thus, it will be more difficult for Baidu as an increasing number of players vie for the ad dollar.
Baidu’s erosion is expected to be slow, yet steady. With search ad revenue is stagnating in China, a new competitor will trouble Baidu’s investors.
Advertising accounted for around 73% of Baidu’s revenue. Consequently, Baidu’s shares are down more than 37% so far this year. The company forecast it could see a year-on-year decline in revenue for the second quarter of 2019. Therefore, ByteDance has a huge chance to replace China’s number one search engine, Baidu.
