Baidu’s participation in the “Metaverse” drama “Hirang” APP can change the current situation of weak advertising business

From a social point of view, Baidu still hopes to use Metaverse to realize its “social dream”.

Baidu Online Network Technology (Beijing) Co., Ltd. (hereinafter referred to as “Baidu”, 09888.HK) recently launched a social app called ” Xiyang” in the Apple App Store . The main immersive virtual social network of this app is The current fiery meta-universe concept coincides with each other.

“Surrounding soil” comes from a mythical story, which means endless life. From the name, it can be seen that Baidu has high hopes for this APP. Currently, Greece has logged on Baidu VR’s official website, which has three major functions: virtual space customization, full human-computer interaction, and business development platform. The login page of the APP is very similar to the game, and currently contains three experience scenarios. At the same time, users can also communicate with other users in the scene, but the actual use effect is not ideal.

Baidu’s operating income and growth rate (unit: 100 million yuan)

Baidu's participation in the "Metaverse" drama "Hirang" APP can change the current situation of weak advertising business

(Data source: Wind)

In the context of signs of weakness in the advertising business of various Internet giants, Baidu selected Meta Universe as an experimental field. Can Baidu, which has missed many outlets on the Internet, take the lead in Metaverse?

Greece still has room for improvement

The various high-profile initiatives of the Internet giants at home and abroad in the meta-universe recently have enabled meta-universe concept stocks in the secondary market to continue to make breakthroughs amidst doubts and cheers.

In March 2021, Roblox Corporation (hereinafter referred to as “Roblox”, RBLX.NSDQ), known as the “Meta Universe First Unit”, landed in US stocks. Soon after, Beijing ByteDance Technology Co., Ltd. (hereinafter referred to as “ByteDance”) also defeated Shenzhen Tencent Computer System Co., Ltd. (hereinafter referred to as “Tencent”, 00700.HK) at an ultra-high price of 9 billion yuan and acquired VR company PICO Corporation.

Greece’s launch of major application stores marks Baidu’s official entry into the “Meta Universe”. However, compared to similar products on the market, Greece’s content is a bit thin.

According to the data, the application scenarios that Baidu plans for Greece include education, exhibition, marketing, training, and industrial parks. Currently open scenes include “Feng Tang Art Layer” and “Baidu World Congress”, corresponding to two application scenarios of exhibition and marketing.

Among them, the performance of Feng Tang’s art layer is more eye-catching, which is different from the art exhibition in reality. The artwork in this scene shows the visual effect of “floating” in the air, and the tone of the entire exhibition hall is also matched with the exhibits. Regrettably, in the two currently open scenes, the phenomenon of “wearing a mold” is widespread, and the interaction with visitors is almost zero. In addition, Baidu just made the artwork into a texture to directly display it, and did not carry out NFT (Non-Homogeneous Token). This makes the visitor’s experience greatly reduced.

Prior to this, Tencent, ByteDance, and Meta Corporation (MVRS.NSDQ) have successively released or introduced virtual products such as Roblox, Pixsoul, and Horizon World. Tencent Roblox 500 in 2019 alone, more than in the Green juvenile use of its development 3D, VR and other digital content; Pixsoul to social as the main play, the main AI pinched face, users can design and use a custom image, you can also upload a photo The system turns the face in the photo into a virtual character; Horizon World supports online real-time chat with 14 people.

By comparison, “Roblox” introduced by Tencent is undoubtedly the most mature and usable one on the market, and the only product with mature user-defined world functions. In contrast, products such as Pixsoul, Horizon World, and Greece, although they also focus on social networking, have not developed enough content to attract users in addition to basic functions.

Many worldviews of animations, movies, and games related to the meta-universe assume that the vast majority of users in the world use the same meta-universe. However, considering the characteristics of the Internet itself, this situation can only happen when a certain company develops an epoch-making product or when a certain company achieves a high degree of monopoly.

The launch of Greek Land can be regarded as Baidu’s exploration of Metaverse based on its own business. However, Greek Land and other products allow people to see the new possibilities of Metaverse while showing some weaknesses in basic technologies.

Can Metaverse be an advertising task?

According to the third quarter report of 2021, Baidu’s total revenue for the quarter was 31.92 billion yuan, a year-on-year increase of 13%. The company’s online marketing still exceeds 60% of its total revenue. In the financial report, Baidu classified this business as a “mobile ecosystem”, which together with intelligent cloud and autonomous driving form a “troika” that drives growth. 

Baidu's participation in the "Metaverse" drama "Hirang" APP can change the current situation of weak advertising business

(Data source: Wind)

In fact, the mobile ecological business has always been Baidu’s most important source of cash. This business is facing the status quo of saturation of the advertising market, and the incremental ceiling is coming. Baidu’s third quarterly report showed that advertising revenue for the quarter was 19.5 billion yuan, a year-on-year increase of only 6%. The financial report also mentioned the subsidiary Beijing Aiqiyi Technology Co., Ltd., whose revenue for the quarter was 7.6 billion yuan, a year-on-year increase of 6%, but advertising revenue was 1.7 billion yuan, a 10% drop from the same period last year.

In fact, Baidu is not the only one with weak advertising business. In the third quarter, Tencent’s media advertising revenue fell by 4%; during the same period, the advertising revenue of station B still increased by 110%, but compared with the growth rate of more than 200% in the previous quarter, it also declined significantly. According to the Shanghai Securities News, Douyin’s advertising revenue has also stalled in the past six months.

It has become a common phenomenon that advertising growth has been hindered, and even short videos that have always been regarded as stealing Baidu’s “advertising cake” have not been spared. According to data from App Growing, in the third quarter of 2021, the number of advertisements placed on the entire network was 36 million, a significant decline. In July, there were still 17 million in the market, but only 10 million in September.

This is not unrelated to the general environment of weak consumption, and advertisers’ life is not easy. Baidu mentioned in its financial report that, affected by policies, online education companies that used to spend a lot of money in online marketing have died down, and the advertising demand in real estate, decoration, insurance and other industries has also declined.

In this regard, what Baidu can do in addition to waiting for the general environment to improve, testing the waters of the universe has also become a new choice. Although in terms of pictures and user experience, Xiyang’s production is said to be rough. However, from a functional point of view, there are many stories to tell about Xiyang. Baidu’s choice of Greece is more like “sharpening a knife and not cutting wood by mistake.” 

Baidu's participation in the "Metaverse" drama "Hirang" APP can change the current situation of weak advertising business

The effect of the Greek app interface

Although Baidu Greek soil will be defined as a social APP, but Baidu for its development of the five scenarios to see, VR marketing, VR cloud exhibition will, VR are relatively close to the industrial park and advertising business. Facing the weakness of the advertising business, it can be seen that Baidu is exploring a new path through Greece. From a social point of view, Baidu still hopes to use Metaverse to realize its “social dream”.

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