Photo/Shetuwang

Mar. 28 (NBD) -- The reshuffle of Chinese Internet search market is around the corner, as market dominator Baidu's grip on web searches and Internet advertisements is loosening.

A report on China's mobile search engine market released by StatCounter revealed Baidu retained leadership in the market with a market share of 70.3 percent.

Shenma, mobile search engine co-developed by UCWeb and Alibaba Group, is holding 15.62-percent market share, being the second largest mobile search engine in China, followed by Sogou (4.74 percent) and 360 (4.45 percent).

Analyst David Dai from Bernstein estimated Baidu's share of the ad market has dwindled to 21 percent versus Alibaba's 36 percent.

According to Baidu's financial results, its Baidu Core business generated operating income of 4.4 billion yuan (654.1 million U.S. dollars) in the fourth quarter of 2018, representing a 26 percent year-over-year decrease and the operating margin dropped to 22 percent from 33 percent for the same period of 2017.

Baidu's profit margin is shrinking as it invests more in contents attempting to encourage users to subscribe to news feed service, and lead traffic to its short video platform and video streaming website, CICC's report said.

By contrast, the domestic search market maintains steady expansion.

The search engine users numbered 681 million as of December 2018, up 41.76 million from the figure by the end of 2017, according to China Internet Network Information Center.

Meanwhile, the market is seeing more players make foray into the sector.

After social media app WeChat, information aggregator Jinri Toutiao, online marketplace Taobao and other platforms accumulated rich contents and formed their own content base in the past few years, and intelligent search functions are created to offer users effective information access.

The personalized advertising and news feed reduce users' resistance to advertisements, which allows companies to explore new ways of obtaining earnings.

For instance, video advertisements that bear high conversion rate and bring quality users to advertisers enable video sharing platforms to survive and even thrive.

As the search market is segmented and shared by competitors in diverse fields, consumers' demand for effective information is yet to be met.

The classic paradigm, technology and product form of the search industry haven't been changed significantly in the past 20 years, as no breakthrough in searching technology and less active search scenarios for users in the mobile Internet era is made, Chen Ye, CEO of AI technology firm Tigerobo told news outlet Yicai. Secondly, people are more likely to accept information passively from platforms.

In fact, seeking clear information actively are still pursued by users, Chen emphasized.

However, the quality of contents obtained from active searches can't satisfy readers, he added.

On the mobile terminal, independent apps resemble information islands. Statistics show there are about 3 million apps in each app store, but the number of apps installed on mobile phones averages only 30, thus numerous high-quality contents in separate apps could barely be reached.

Besides, the undesired information and advertisements filling the search website also worsen users' search experience.

Email：zhanglingxiao@nbd.com.cn