At the beginning of the year, he shouted a search for Baidu's 2% - 3% search share each year. In the afternoon of July 30th, it announced the second quarter earnings of 2018 as of June 30th.
The results showed Sogou's second-quarter revenue exceeded $301 million, or 1.923 billion yuan, up 43% year-on-year and 21% year-on-year. Net profit of US $38 million 200 thousand under non US GAAP was 58% higher than that of the same period last year, a 40% increase over the same period.
Sogou CEO Wang Xiaochuan said that the AI strategy of Sogou, with language as its core, is increasingly clear. "We will continue to increase the proportion of the first page of the search result page to make the search more intelligent; we will improve the understanding of the language by AI and truly assist in the dialogue; and the Sogou will also speed up the layout of the smart hardware and make the AI technology better."
An increase of 45% over the same period
Most of the revenue from Sogou still comes from traditional search and related businesses.
The report showed that the two quarter of the two quarter search and related business revenue of $271 million, up 45%, including smart hardware and Internet value-added services, including other income of 30 million US $30 million, a year-on-year increase of 27%.
The cost of access to traffic is still rising. Traffic acquisition costs in the second quarter were $135.7 million, up 91% from a year earlier, accounting for 45% of total revenue, compared with 33.7% in the same period in 2017, Sogou reported. At the beginning of the year, Wang Xiaochuan told first finance that the traffic cost in 2018 was expected to increase by 50%.
Sogou's R&D costs in the second quarter were $56.2 million, up 48% from a year earlier, and its sales and marketing costs were $33.9 million, down 8% from a year earlier.
In search of this field, Baidu is a strong competitor. What Sogou is doing is finding the direction of differentiation in the medical, legal and educational fields.
For example, search for medical search in Sogou mobile search increased by 32% more than a year ago, and the click rate of web search for authoritative medical content was 67% higher than a year ago.
In terms of search traffic acquisition, Tencent has brought Sogou to a certain proportion of search traffic. In the second quarter, in addition to the integrated search results of the integrated search for Sogou, WeChat joined the encyclopedia and Sogou in its encyclopedia and quiz and other vertical searches, making the search results in WeChat search increasing.
Sogou also mentioned the impact of earlier tremor on the advertising of humiliate content in search dog search. Sogou suspended part of the ten - day advertising business in July this year, which is expected to lead to a one-time reduction in the third quarter of 2018.
Looking for the next growth point
In the past PC era, dog search was modeled as an input-browser-search, a three-stage rocket driven by end-to-end search, in which search was the core. But now, in addition to search business, Sogou is looking for the next growth point.
Wang Xiaochuan previously told the first financial interview that this year, this year, Sogou has to strengthen two things: one thing is the strategic upgrade of the input law business, it will not only be a typing tool, but the ability to carry information and flow distribution; the other is the landing of the AI application scene.
The more than 10 year history of Sogou input method to the front desk, through the AI upgrade, let it in addition to typing, carrying information access and traffic distribution, which will be the next important business growth point of Sogou.
Next, the Sogou input method is to connect information, connect services, and connect merchandise. Wang Xiaochuan previously cited an example, when the user through the input method dialog "where to eat at noon", the input method may directly help users list the candidate catering services.
Wang Xiaochuan has said that this is just a supplement to the giants' fiercely competitive information flow business. At present, Sogou browser, Sogou search APP, input method and other products all have the ability to access information flow. He believes that Sogou has large data reserves, accurate user portrait, and Sogou has one hundred thousand customer groups, and information flow will be a supplement to the form of a product. For example, Sogou can help with the development of information flow and Internet Finance by improving the large data capacity of the mobile input method and improving the accuracy of the user's portrait.
At the AI application level, Sogou announced the virtual anchor technology at the July Hongkong RISE conference. The technology combines face recognition, face modeling, speech synthesis and depth learning. It can translate any text into the corresponding lip language, and provide users with multimodal interaction experience and highly customizable. The technical realization of virtual anchor means that AI has gone to the rich media expression of audio and video.
According to the first financial reporter, Sogou will also launch four smart hardware this year, which also shows its determination to hardware AI.
For earnings forecasts, Sogou expects third-quarter revenue of $275 million to $285 million, up 7% to 11% from the same period in 2017.
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