The rise of AI-powered search engines is reshaping how people find information online. Companies large and small are competing to dominate this space. Baidu, a long-time leader in search, is now facing challenges from both content platforms and AI-powered search solutions like Kimi.
Declining Popularity of Traditional Search
Baidu’s recent financial reports highlight a trend: the dominance of traditional search engines is waning. Baidu’s Q3 2024 revenue was 33.6 billion yuan, down 3% year-on-year. Its core advertising revenue also fell by 4%.
Statista data shows Baidu’s Chinese search market share dropped to 55.85% in May 2024, compared to 86.82% in 2021. Content platforms like Douyin and Xiaohongshu, along with vertical apps like Dianping, are eating into Baidu’s user base.
AI search engines further disrupt this space. Many users now prefer AI-based platforms for direct answers, citing fewer ads and more straightforward results. However, skeptics remain, pointing out occasional inaccuracies in AI-generated responses.
AI Search Gains Momentum
Baidu has integrated AI capabilities into its search platform. Its AI-powered assistant, Wenxin Yiyan (now rebranded as Wenxiaoyan), generates over 20% of search results and is used by 70% of its app’s active users.
Meanwhile, competitors are innovating rapidly. Companies like Douyin, Kuaishou, Alibaba, and Tencent are embedding AI-driven search features into their platforms. Startups such as Dark Side of the Moon, with its popular Kimi tool, are also gaining traction. Kimi simplifies tasks like report summaries and data searches, drawing millions of users monthly.
The Challenge of Monetization
Despite growing popularity, monetizing AI search remains a challenge. Subscription models and premium features are one approach, but user tolerance for errors decreases with paid services. For B2B solutions, advertising offers potential, but startups without established advertising ecosystems face stiff competition from giants like Baidu and Tencent.
Future Prospects
AI search engines are not yet comprehensive enough to fully replace traditional search engines, which serve as versatile tools for a wide range of needs. To succeed, AI platforms must improve content accuracy and reliability while developing sustainable monetization models.
Whether traditional and AI searches will coexist or one will dominate remains uncertain. What’s clear is that the search landscape is undergoing a profound transformation.