Weekly Chinese Internet Notes: Baidu In Focus
In this week’s Chinese Internet notes, we take a look at Baidu (NASDAQ: BIDU). The head of Baidu’s artificial intelligence center shed light on the company’s progress in Deep Learning, which enables it to offer services from voice-based search to semi-autonomous cars. Further details have also emerged on Baidu’s smart bike. Meanwhile, Baidu completed an acquisition to extend its footprint in the online finance space. It also entered into an agreement with a tourism agency in South Korea to help improve travel offerings there.
Our price estimate for Baidu’s stock is about $211, which is around 15% below the current market price of $246. Baidu’s stock gained slightly in trading over the week. We forecast 2014 revenues of $7.7 billion for Baidu in 2014, which is slightly lower than analyst consensus estimates compiled by Bloomberg Businessweek. [1]
Andrew Ng On Deep Learning
Deep Learning is a technology that helps computers find out patterns among audio-visual data and process them to aid decision making. To enhance its competency in this field, Baidu hired the head of Google’s artificial intelligence division, Andrew Ng, six month ago. According to Ng, 10% of the queries received by Baidu search are in voice format. Deep Learning is used by the search engine to understand the query, and respond with search results. According to him, Deep Learning has received too much publicity and many of the startups in the field are driven mostly by hype. Baidu, on the other hand, has a 96 strong team dedicated to this technology, which is likely to double this year. [2]
New Details Emerge On Smart Bike
In our last weekly note on the Chinese internet segment, we wrote on Baidu’s foray into smart bikes through its DuBike (See Our Earlier Weekly Internet Note). According to a report on 36kr.com, the health metrics measured by the bike have been identified as “pedaling frequency, foot pressure, heart rate, velocity, and seating pressure”. This data is fed into an app that provides suggestions to improve the workout. Additionally, the bike has a handlebar that indicates directions to help navigation using a built in Global Positioning System (GPS) and operating system that helps locate and plot routes for cycling. [3] As we said in our earlier weekly note, the bike is expected to hit the market in China by the end of this year.
Acquisition Of 99Bill
Baidu has acquired online payment service 99Bill.com. The deal is supposed to be valued at $326 million. 99Bill offers several services such as currency remittance and withdrawal, service bill payments and other online payments. China’s online payment market is large and growing, though there is fierce competition in the industry. [4]
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