Shulou(Shulou.com)06/03 Report--

Recently, Sogou released his financial results for the first quarter of 2020.

According to the financial report, Sogou's total income in the first quarter was $257.3 million, an increase of 2% over the same period last year, with a net loss of $31.6 million. Prior to that, Bloomberg agreed with market expectations that Sogou's Q1 revenue was expected to reach 251 million yuan, down 0.8 per cent from a year earlier. Sogou's revenue in the first quarter was higher than expected.

Of this total, search and search-related revenue reached $237.6 million, an increase of 1% over the same period last year, accounting for 92.3% of total revenue. Other income was $19.7 million, up 6% from a year earlier, accounting for 7.7% of total revenue. Sogou said that the increase in other income was mainly due to the increase in sales revenue of smart hardware products in the first quarter. Sogou's smart hardware shipments increased in 2020, which increased rapidly compared with the same period last year, thus driving up the overall income growth.

Analysis of Sogou's revenue changes in recent years, the overall trend of steady growth. Sogou's income mainly comes from search and search-related advertising services. But the growth trend of its search-related advertising revenue has slowed since 2018. While other income has been growing, but has not been able to form a scale.

Sogou expects total revenue to reach $260 million-$280 million in the second quarter of 2020, down 8 per cent to 14 per cent year-on-year, or 4 per cent to 11 per cent in renminbi terms. The reason for the decline, Sogou said, is taking into account the expected continued impact of COVID-19 's outbreak of China's economic contraction, as well as the macro environment and other challenges of the online advertising industry.

Sogou currently has three main business lines, one is Sogou browser, the second is Sogou Input, and the third is intelligent hardware products, all of which are in a harsh competitive environment. Although they all occupy a certain market share, they do not have an advantage in their own resources. with the changes in the market, it is a difficult problem for Sogou to continue to persevere in the future competition.

The unoptimistic search engine market

At present, the domestic search engine market is still the largest of Baidu. Although Baidu has made frequent efforts to reduce the favor of users in recent years, Baidu, as the largest Chinese search engine, has occupied a high market share since its inception. It is still about 77% in China. " "find Baidu with questions" has become a deep-rooted idea of users for many years. In addition, Baidu has tens of thousands of senior engineers within the enterprise, which Sogou cannot compare.

According to a survey report by CTR, Sogou accounted for 18.3% of mobile search engines in the Chinese market in December 2019, and has been quite robust in the highly competitive search engine market. Because of its cooperation with Tencent, Zhihu and other strategic partners, the search content of Sogou browser has been greatly enriched, and there are many fans among users.

However, in terms of market share, it is still facing cruel competition.

Among them, 360 makes use of its advantages in the client field, through security guards, browsers, secure web sites and other channels of search functions, hard diversion for 360 search, greatly increasing the market share of 360 search.

In addition, Firefox browser is also popular with users because of its high speed and stability, and the web page can be played at twice the speed. Alibaba launched a more concise and purer browser for users' pain points, quark, which integrates a large number of e-book resources and has a certain market among young people with a wider range of similar features.

Huawei also tested the launch of the Huawei search APP tool in March. Byte jump, which has attracted a large number of users with information and short videos, also announced the establishment of a search department a few days ago to create a new search engine.

The competition in the future search engine market will only become more and more fierce. In the future, users' requirements for search engines will be more intelligent and personalized. In the case that there are Tigers in front and chasing soldiers after, and users are becoming more and more picky, Sogou will be very difficult to keep his place.

The input method meets a strong opponent.

Sogou Input, as the "leader" of Pinyin input method, occupies the highest market share for a long time, and is the input method with the highest range of use and popularity. In 2019, Sogou creatively introduced AI assistant into the input method product, and added facial expression recommendation, quip recommendation, information recommendation, weather recommendation and "chat for you" and other functions to improve the user experience.

According to Ai media data, in terms of China's third-party mobile phone input method user share in the first half of 2019, Sogou Input accounted for the largest user share, at 43.2%. Secondly, the user share of Baidu input method is also large, which is 43.1%. In addition, iFlytek Input accounts for 8.7% of users.

At present, mobile phone input method will be an important application scene of AI technology. With the maturity and progress of AI technology, it tends to be more intelligent. In the future, the input method will compete comprehensively in many aspects, such as AI technology, function innovation, landing speed and so on.

According to Ai Media Consulting, Sogou Input ranked third in 2019 after Baidu input method and iFlytek Input in the overall satisfaction score of China's mainstream third-party mobile phone input method AI technology. Therefore, in the case of not much difference in market share with Baidu, Sogou is likely to lose his position as the number one user market share.

And now win10 has its own input method, as well as QQ Input, Google input method, etc., have accumulated a certain number of users, with the opening and further development of the market, the emergence of more personalized input methods, coupled with Sogou Input's much-criticized advertising pop-up window problem, Sogou Input's position among users is in jeopardy.

Continuous AI

Sogou's smart hardware products began in 2014, after Tencent, Baidu, Xiaomi and 360th, launched the children's smartwatch "Sugar Cat", marking its official entry into the smart hardware market, taking an important step from tools to services.

In 2018, Sogou CEO Wang Xiaochuan said at a press conference that wisdom strategy will be an important part of Sogou's future strategy. In order to comprehensively drive wisdom and realize Sogou's strategic layout, smart hardware began to become important to Sogou.

In 2019, Sogou's main product lines include Sogou AI (voice technology hardware implemented through AI technology) and Teemo (children's intelligent hardware products). In 2019, Sogou introduced a variety of upgraded products to the market, and put forward the goal of further diversifying the product matrix and strengthening the channel.

Sogou's intelligent recording translation pen adds new high-quality functions such as shorthand, translation and simultaneous interpretation at the same price as other recorders and at a lower price. Combined with the previously launched travel translation treasure, Sogou's intelligent products form the law of "translation + hardware", combined with AI technology and hardware, from text translation, dialogue translation, image translation, and simultaneous interpretation to consumer-grade products.

It is reported that Sogou won the Chinese-English machine translation championship in the top AI competition WMT2017 in 2019 and won the first place in the main machine indicator BLEU. As one of the leaders in the domestic AI+ voice field to subvert the traditional voice industry, translation ability may become the hub of its hardware and market pass.

At present, in addition to the layout in the field of intelligent hardware, Sogou has also set up an artificial Intelligence Research Institute, which focuses on the future direction of the intelligent Internet. Sogou CEO Wang Xiaochuan said that Sogou will release an AI product in the second half of this year. Hardware revenue is expected to increase as a percentage of total revenue this year and will be profitable next year.

In view of this, at present, Sogou's main business-Sogou search and Sogou Input are in a highly competitive market environment, revenue growth is difficult. In addition, its revenue can not cover its input cost, and it has been in a state of continuous loss. Sogou, who is betting on intelligent hardware, still has a long way to go if he wants to rely on AI to turn losses into profits.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.