China’s Baidu opens augmented reality lab to boost waning profits

Women are photographed in front of a Baidu sign during a new product launch in Shanghai, China, November 26, 2015. REUTERS/Aly Song/Files

Chinese search engine Baidu Inc on Monday launched an augmented reality (AR) lab in Beijing as part of a $200 million effort to revitalise the company’s shrinkingprofits with cutting edge technology.

The lab, which currently employs 55 people, will initially aim to drive revenue through AR marketing, though will later explore healthcare and education.

“AR marketing is taking off,” Andrew Ng, the chief scientist overseeing Baidu‘s artificial intelligence (AI), augmented reality and deep learning projects, told Reuters.

“There are few content formats where the content is evergreen – AR will be like that,” he said.

Popularised in 2016 by Nintendo Co Ltd’s Pokemon Go game, augmented reality involves rendering virtual images over real life settings viewed on a smartphone, headset or other device. 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 slashed into the profits of its core search business and saw ad customers drop 16 percent in the quarter ended in September.

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

The company in a statement said it is currently working with AR in China with Yum! Brands Inc’s KFC, BMW and L’Oreal SA’s Lancome among other brands, and has demonstrated a small range of high-end applications.

Baidu began working on the technology two years ago, and is working on integrating it with AI to produce visuals capable of interacting with real-time surroundings, unlike current popular AR games.

“It’s working quite well now, but it’s clear that it could be better,” said Ng. “I’m quite optimistic.”

AR technology is still going through a regulatory teething phase in China. While Pokemon Go is yet to launch there, location-based AR concepts have sprung up, drawing the ire of regulators who have refused to license some services over security concerns.

According to Ng, Baidu is yet to run into the same issues.

“I feel like the abilities for AR have risen up in China faster than the Western world may be aware,” said Ng.

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Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.