Wechat Search : A Powerful New Function To Compete Against Baidu

Tencent released a feature that made the buzz in tech circles: WeChat search. As Baidu seems to be losing traction, the entrance of Tencent and its explosive growth in the search business is likely a good changer. Let’s take a closer look. How to activate WeChat search? First of, you might notice that search is not on your WeChat interface. That’s actually normal. In order to activate WeChat Search you need to:

• Update to the latest version of WeChat
• Go to the “Me” section of your profile
• Click “Settings”
• Click “WeChat Labs”
• Click on “Search” and “Top Stories” and toggle “Enable”

What does WeChat search do?

WeChat search enables to search 3 types of content: WeChat moment, WeChat articles, and WeChat Official Accounts As such WeChat Search is very different from Baidu as it doesn’t index the whole Internet: it simply lists the content accessible within WeChat. It is expected that the search feed will soon start showing Wechat Ads similar to Baidu PPC (pay-per-click) or Google advertising.

Is it dangerous for Baidu?

The short answer is: yes, this is a huge threat for Baidu. There are a few reasons for that. #1. Baidu is often used to check on company’s background & reputation If a Chinese customer wants to buy a product, he or she will most likely directly head over to Tmall or JD depending on the product category. Baidu is mostly used to do some “background check” on companies, or to search for services. With WeChat Search, Tencent is giving a powerful way to look up companies, maybe much more powerful than Baidu: you are able to see the engagement of other users with brands, what they published recently, the social comments they receive. It is much more exhaustive and trustworth data than simple search rankings #2. Baidu isn’t doing well at all Although Baidu’s revenue are still (very slowly) growing, Baidu actually saw a decrease of its operating profits. In the same timespan, Tencent revenues and profits have been booming to the tune of 50% yearly growth. As a result, Tencent stock which used to be half of the price of Baidu stock in November 2014, is now almost twice more valuable than its search counterpart. #3. Tencent is already in the search business with Sogou Tencent purchased a 36.5% stake in the search engine Sogou. So Tencent knows search beyond WeChat, and is about to leverage powerful synergies in terms of data and tech between Sogou and its own WeChat Search division. Sogou had been pioneering the “WeChat search” concept by being the first search engine able to index WeChat content in one of its special sections. Such integrations already started happening as QQ browser includes Sogou search. #4. Data, data, data For all its complexity, it is easy to understand what is the currency of the search industry: data. Search business strives on data. The more data there is, the more accurate searches get, and the more people use your search engine, and on it goes. It’s the virtuous circle of big data. And Tencent is winning this war: WeChat is increasingly popular and sticky among users. More and more people use the App, and they use it more and more. This gives Tencent an insane amount of data to fight against Baidu. Baidu keeps claiming it is an “A.I-centered company”. But A.I isn’t built out of acquiring small failing or unprofitable A.I startups. It is built out of creating a great product, having a lot of people use it and building powerful algorithms on top of the data generated. And in this A.I-powered future, Tencent and Alibaba seem much better equipped than Baidu to tackle the challenges ahead.

Conclusion

WeChat Search is big news in the tech world. Although the function is very different from Baidu China search engine, it lets us imagine a future where people would use WeChat to learn about brands, and then go to JD or Tmall (or WeChat Official Accounts) to purchase products. In this future, is there a space for Baidu? Maybe not.