The future, as Robin Li sees it, is not in search but in services, connecting people through the Web to thousands of entrepreneurs and businesses in the real world. He’s betting billions of dollars on the untested vision, risking revolt among investors as he sacrifices profit today for future growth.
The significance of the effort was made clear last week when Li took the stage at Baidu’s annual conference in Beijing. Internet search, which generates virtually all company profit, barely rated a mention. Instead, the Baidu founder declared his top priority is the online-to-offline push, known in geek-speak as O2O.
“We are actually transforming the company from connecting people with information to connecting people with services,” said Li, 46, in an hour-long interview after the presentation.
To Li, the math is simple. While search advertising is big, the services and retail market is much bigger. The initiative will “definitely” eclipse search revenue over time, he said.
Li, Baidu’s chief executive officer, says many U.S. investors just don’t appreciate the changes in China, where O2O services are taking off fast because of new smartphone technology, cheap labor and terrible traffic. He’s concerned Baidu, which trades on Nasdaq, is being penalized because shareholders don’t see the opportunity.
Agreed! Every day is a negative headline about China!