Baidu has been dropping in growth despite its increase in revenue due to its heavy investments in O2O. (Photo : Reuters)
Baidu is branching out from being a search engine-based company to interconnecting the real world, according to Zhang Yaqin, president of China's largest online search company, reported China Daily.
Linking online users with offline services, known as online-to-offline or O2O, will be Baidu's newest engine, with the company investing while giving them time to become profitable, said Zhang.
"In the past, our focus has been searching the right information for users anywhere. In the future, we want to interconnect the real world, connecting people to services," Zhang told China Daily at the World Internet Conference in Wuzhen on Wednesday.
Despite the success of its search business, Baidu has been investing billions of dollars in the O2O sector, buying startups like group-buying site Nuomi, online travel agency Qunar and on-demand laundry service edaixi.
Zhang said that the journey is "very exciting." Baidu aims to create an online platform to cater to all dimensions of location-based lifestyle, allowing consumers to buy movie tickets, order food for delivery and even book flights.
"The O2O market is much bigger than the online search market," said Zhang.
Baidu reported a 36-percent fall from the previous year in terms of third-quarter operating profit even with a rise in revenue. This has been attributed to the heavy investments the company has been making in the O2O sector.
The company's shares especially dropped in the United States.
According to Zhang, there is an opportunity in China when it comes to O2O, one that may not be understood in the U.S.
"In China, because of its demographics, cost structure and population density, you can leverage a lot, and the infrastructure and technology will help us," said Zhang.
Before joining Baidu in Sept. 2014, Zhang was Microsoft's corporate vice president and chairman of Microsoft Asia R&D Group.
