Saturday, December 30, 2017

baidu ai update oct 2018

Our use of AI to strengthen Baidu's core business is also generating new use cases and opening Baidu up to exciting new markets, such as AI as a Service. We are seeing AI extend beyond the Internet into everyday life and this presents Baidu with large new market opportunities in the 2C, 2B, and 2G markets.
Let's begin Q3 with search and feed. In core search, top 1 now compresses of over 40% of our search queries. And video search is becoming ever more popular with daily queries in the tens of millions, doubling from last year.
This AI-powered feature not only differentiates Baidu's search experience, but also enable us to introduce features like Smart Answer or Smart Screen. For example, a user of Huawei, OPPO, or Vivo smartphones with Baidu AI may take a photo of a plant or a pet. And the phone screen will return the card with information about the (05:20) in the photo. Smart Answer can also identify and provide information about celebrities, points of interest, and so forth.
IDC recently reported that smartphones' shipments in China declined 11% year over year in the first half of this year, making it more difficult for less frequented apps to continue traffic acquisition from app pre-installations.
Mini Programs have become a new source of traffic without requiring merchants to have native apps. We launched the invite-only phase of our Smart Mini Program in July and monthly active users ramped up quickly, surpassing 100 million in September. We have received favorable feedback from users, developers, and our network partners. And program registration was open to the public at the end of September.
We are on track to open source our Smart Mini Programs, which enable apps to join our Host, Union, and (06:38) Smart Mini Programs. Our Smart Mini Program open approach, by design, makes the information in Baidu's Smart Mini Program network searchable.
Moving on to Baidu Apps. In September, average daily active users of Baidu App reached 151 million, up 19% year over year, and time spent on Feed grow 68% year over year. In the two short years that we launched the Baidu Feed, we have added 276 MCNs and over 1.5 million content publishers, up from 1 million two quarters ago.
Twin-engine search plus feed offerings, coupled with unmatched AI-powered recommendation technology deep inside of our massive user base, makes Baidu Apps a compelling offering. A twin-engine apps not only provides better user experience but also generates better unit economics.
Excluding iQIYI, Baidu distributes over 2 billion video views per day. The strong demand for video content on Baidu's platform places us in a good position to offer more variety of video feed. We are replicating the Baidu Apps formula to develop video-only feed apps. For example, we began experimenting with Haokan this year, and in September, Haokan reached a DAU of 12 million.
According to QuestMobile, Haokan was the fastest-growing apps from June to September among all mobile apps in China, with a DAU of more than 5 million.
On monetization, the strong traffic growth of our feed, as well as video traffic are contributing to Baidu's revenue growth. In addition, our industry-leading use of AI to power ad monetization as dynamic ads, mobile action ads, and optimized cost per click, continues to position Baidu as a compelling source of performance-based traffic.
Baidu is pushing the boundary of innovation with cutting-edge technologies to better meet our customers' needs. For example, using blockchain and visual search to combat fake goods and generate more revenue for our customers.
Hairy crabs from the Yangcheng Lake in Jiangsu Province apprised four-season delicacy in China. This year, we worked to build hairy crabs fisheries from the Yangcheng Lake to set up a Smart Mini Program to enable consumers to verify product authenticity via the Baidu App.
Blockchain ensures a tag or a cart's uniqueness, while visual search provides a matching reading to ensure that the product was not switched. The combination of the two technologies have significant commercial value for merchants of big ticket items sold online.
Baidu has made significant strides to proactively improve the quality of healthcare information, and consumers are increasingly dependent on Baidu for healthcare-related services. We are developing a search solution to organize healthcare information into a structured format, so that users can more easily compare services across healthcare providers.
Our solution will verify the identity of licensed medical institutions and use AI to monitor the information quality on the landing pages, as well linked to such structured data instead of third-party websites. Although, these efforts to improve user experience may impact our revenue in the near-term as users get used to the new information structure, we believe they will ultimately lead to better traffic conversion for healthcare providers.
Turning to DuerOS, Baidu's voice assistant. DuerOS continues to gain traction as we focus on user experience, such as improving natural language processing, which enables endless conversation, and building out DuerOS scale ecosystem. We have seen people across China, from Tier-1 to lower-tier cities, from toddlers to senior citizen, use DuerOS-powered devices to perform or search, watch videos, listen to music, make video calls, and control IoT devices in their homes.
In September, DuerOS installed base reached 141 million, up from 100 million in July, and voice queries on DuerOS continued its rapid rise, surpassing 800 million times, which roughly doubled every quarter for the past seven quarters.
DuerOS skills store now has a community of over 24,000 developers and over 800 skills available, such as education, cooking, and game genres such as VIPKID, Cooking Recipes and Digital Pets, respectively.
DuerOS partners continue to expand from TVs to smart meters to smart watches. In addition to homes, DuerOS also expanding its partnership in the IoV environment. For example, UCAR, better known as Shenzhou Zuche, a car rental and ride-hailing service provider, will be installing DuerOS on its fleet of new vehicles.
Turning to Apollo. We are gaining valuable experience in commercial operations with Level 4 vehicles. The Xiamen King Long produced Apolong, Apollo-based fully autonomous minibus, is currently running in over 10 locations throughout China. We are learning that end customers are requesting to purchase wholesale annual maintenance plans, and that the passengers are willing to pay for a ride on the Apolong minibuses. For example, Guangzhou's sunflower garden charges RMB 20 a ride for adults and RMB 10 for children.
Smart city utilizing AI to improve urban living presents Baidu with a great opportunity to serve the 2G market and bring Baidu AI to everyday lives.
The municipality of Changsha have just signed with us to be the first municipality in China to test robot taxi and our connected road solution, powered by Apollo. We are also in discussions with Beijing and Shanghai, whose population is almost equivalent of three New York cities to provide AI-powered city management solutions to help with urban safety, traffic congestion, and public parking, leveraging Baidu Brain, Baidu Cloud, and autonomous driving technologies to improve urban living.
Turning to ABC Cloud. Baidu Cloud continue to grow robustly, and recently recognized by third-party market research firm, Analysys, as the fastest-growing and among the top three most technologically advanced cloud service providers in China. And Baidu ABC Cloud Summit in Shanghai last month, we announced new enterprise solutions with advanced AI capabilities to serve the transportation, education, and financial services industries.
Our AI as a Service approach aims to help customers increase productivity and improve operational efficiency. For example, a top Chinese telco choose Baidu's ABC Cloud with AI as a Service to power their call center. Baidu Cloud was chosen for our differentiated AI technology in speech recognition, natural language processing, and knowledge graph, enabling endless conversation and sparing customers the tedious experience of IVR menus.
Using Baidu's enterprise AI solution, the call center saw dramatic improvement in customer service quality, with average call time falling 70%, and Baidu's AI solution handling millions of calls per month. At Baidu World in Beijing tomorrow, we will share many more case studies illustrating Baidu's enterprise AI solutions now serving over one dozen industries.
Turning to iQIYI. In the third quarter, iQIYI added a record 13.5 million subscribers, reaching a total of 80.7 million subscribers, driven by top-quality content and blockbuster originals like Story of Yanxi Palace. iQIYI continues to rank number one across reach and in engagement metrics in the third quarter, according to third-party market research firms.
Also during the quarter, iQIYI co-launched a hybrid OTT box, with Beijing Gehua CATV network, featuring DuerOS voice assistant video search and children's mode. The hybrid OTT box enables users to access both iQIYI videos and cable TV from one box, an industry first.
Partnerships such as this help DuerOS and iQIYI extend presence into the fast-growing OTT market and exemplify the unique value proposition that Baidu and iQIYI can offer, working in tandem.
With that, let me turn the call over to Herman to go through the financial highlights

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