Revenue of China's Search Engine Companies Set a New Record in 2017

Source:iResearch January 24,20183:58 PM
iResearch estimates that revenue of search engine enterprises will exceed 110 billion Yuan, up 24% (over 20 billion Yuan) from a year earlier, indicating that the growth rate came back to medium to high speed. iResearch believes that there are two main reasons for search enterprise revenue hitting a new record in 2017: On the one hand, search advertising went out of the shadow of the previous year’s policies and its value came back to a normal curve; On the other hand, news feed advertising, a new business of search engine enterprises, grew rapidly, being the new driving force of search enterprise revenue. What’s more, in the next two or three years, news feed advertising will continue to promote the revenue of search enterprises. 

iResearch estimated that revenue of China’s search advertising would reach 93.7 billion Yuan in 2017, rise 22% from a year earlier. iResearch believes that the fast growth can be attributed to the following two factors. For one thing, advertisers of some industries such as health care decreased under the influence of policy in the previous year, but in 2017, they rebounded in number. For another, the per customer transaction of advertisers increased. The two factors promote the overall increase of search advertising. However, iResearch holds the opinion that although search advertising is not influenced by policy, it still encounters greater challenges. A potential risk is about entrance of universal search, to be specific, on the one hand, mobile apps with the islanding effect divert many searching advertisers; on the other hand, in the future competition of entrance to internet of things, search advertising will face many formidable competitors, such as cellphone manufacturers, operating system, super app and so on. As a result, future of search advertising is still full of uncertainty. 
 
The structure is stable and artificial intelligence is the strategic weapons for enterprises to win the competition.

2017 is a year of harvest for searching enterprises. For one thing, revenue of search enterprises increases significantly, and news feed advertising becomes a new growth point in business; For another, among the important participants in search market, Sogou successfully listed in US stock market, entering into the ranking of companies with a value of 5 billion Yuan, and Qihoo 360 has achieved some progress in returning to A-shares, waiting for a key movement.

Till now, in China’s search engine market, the main search engine enterprises that started their business in age of PC have all entered into the capital market, indicating that China’s search market is moving to maturity. Search enterprises start a new journey on the stage of internet. Voice interaction, visual identity, natural language processing, more extensive research of artificial intelligent technology and implementation of commercial ideas will be key points to promote search enterprises to bloom in the future and have already been the strategic weapons which has great influence on the competition pattern of search enterprises.

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