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January 17, 2017

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Battling Baidu sees hope in new reality

CHINESE search engine Baidu Inc yesterday launched an augmented reality lab in Beijing as part of a US$200 million effort to revitalize the company’s shrinking profits with cutting-edge technology.

The lab, which employs 55 people, will aim to drive revenue through AR marketing, although it will later explore health care and education.

“AR marketing is taking off,” said Andrew Ng, the scientist overseeing Baidu’s artificial intelligence, AR and deep learning projects.

“There are few content formats where the content is evergreen — AR will be like that.”

Popularized in 2016 by Nintendo Co’s Pokemon Go game, AR involves rendering virtual images over real life settings viewed on a smartphone, headset or other devices. In marketing, the software can be used to animate a product or a branded space.

Baidu’s AR launch comes as the company gears up to report full-year earnings next month. It has forecast a revenue drop of around 4.6 percent as it grapples with the aftermath of new government curbs on medical advertising.

Those curbs have eaten into the profits of its core search business and saw ad customers drop 16 percent in the quarter ended in September.

The company injected US$200 million into its AI and AR unit in September to kick start growth, followed by the announcement of a US$3 billion investment fund focusing on mid-to-late stage startups.

The company is working with AR in China with Yum! Brands Inc’s KFC, BMW and L’Oreal SA’s Lancome.



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