Tencent opens Yuanbao Search on the open web as Baidu's ad revenue falls 19%
Tencent's standalone page goes after a market Baidu has held for two decades, where Baidu's online marketing revenue just fell 19% and Google's Q3 miss shows AI answers slowing search ad growth. Tencent earns its money elsewhere; Baidu does not.
Vincent Jiangthree-minute read
A search box with no app attached
On November 11, Tencent put Yuanbao Search on the open web: a standalone page that needs no download and searches the open web, WeChat Official Accounts, WeChat Channels and academic papers, with AI assembling the answers 1. The page is live 2. Tencent has not run a standalone search product since Soso was merged into Sogou in 2013; WeChat's search stayed inside the app 1.
The door opens onto a shrinking business
China counted 782 million search users in December 2025, 69.5% of internet users, down from 878 million a year earlier 1. Baidu−2.38% — Baidu, down 2.38 percent today App still reaches 644 million monthly users 1, but the business behind the query box is sliding: online marketing revenue fell 19% year over year to ¥13.1 billion in the second quarter of 2026, inside total revenue of ¥31.3 billion, down 4% and short of estimates 34. By October 2025, roughly 70% of Baidu's mobile result pages were already AI-generated 1; as The Inference reported in September, the AI cure has been shrinking the patient.
Baidu's revenue has gone sideways for three years while profit slid
Quarterly net income slid from about $1.1B to $0.34B as online marketing shrank
- Revenue
- Net income
Data
| Revenue | Net income | |
|---|---|---|
| Q3 '23 | $4.72B | $0.92B |
| Q4 '23 | $4.92B | $0.37B |
| Q1 '24 | $4.37B | $0.76B |
| Q2 '24 | $4.67B | $0.76B |
| Q3 '24 | $4.78B | $1.09B |
| Q4 '24 | $4.68B | $0.71B |
| Q1 '25 | $4.47B | $1.06B |
| Q2 '25 | $4.57B | $1.02B |
| Q3 '25 | $4.38B | -$1.58B |
| Q4 '25 | $4.68B | $0.26B |
| Q1 '26 | $4.65B | $0.5B |
| Q2 '26 | $4.61B | $0.34B |
Baidu is holding back the ads as a rival arrives
Julius Rong Luo, the executive who runs Baidu's mobile ecosystem, told analysts in August that Baidu is "deliberately holding back on monetizing the AI search," that competition for users' attention has intensified, and that advertising will remain under pressure through the second half 3. Tencent carries none of that conflict.
Yuanbao Search product lead Li Ruizhang says the page "does not reject ads, but users should not have to find answers in ads," and Tencent earns its living elsewhere, in WeChat 1. The index is already built: Tencent Cloud opened it to enterprises in October at trillion scale, with 157 authoritative sources across 13 fields, already serving more than 50 businesses including WorkBuddy and ima 1.
Google has priced the shift
Alphabet+2.52% — Alphabet, up 2.52 percent today put a number on what AI answers do to search ad money: third-quarter search advertising grew 12% to $63.4 billion, a second straight miss 56, and chief business officer Philipp Schindler said strong AI Mode query growth "had an impact because of the lower monetization" there 5. On October 15, Google began moving links higher inside AI answers 7. AI Overviews claims more than 2.5 billion monthly users 1.
Baidu's app is smaller than either of Google's AI search doors
Google's AI Overviews claims 2.5 billion monthly users to Baidu App's 644 million
Data
| Value | |
|---|---|
| Google AI Overviews, Jun 2026 | 2,500M |
| Google AI Mode, Jun 2026 | 1,000M |
| Baidu App, Q2 2026 | 644M |
Baidu's answer shipped the same day
The counterpunch is real. On November 11, Baidu released ERNIE 5.5 Flash Preview, 280 billion parameters with only 14 billion active, and promised the open weights by November 25 9. AI cloud revenue grew 50% last quarter; GPU cloud grew 283% 3. Tencent's own risk is content: Official Accounts mix rigorous analysis with marketing filler, and more content can amplify the chaos rather than filter it 1.
Two dates settle it: ERNIE's weights and Baidu's ad line
The race is between Baidu's ad base eroding and AI search being repriced, now that a rival with WeChat's wallet is spending on the entrance itself. Baidu (BIDU) is the exposed ad publisher; Tencent (TCEHY) holds the new door. Watch November 25 for the ERNIE weights, whose $50 million tripwire we charted on November 5, then Baidu's third-quarter advertising line. Baidu has charged rent on China's front door for twenty years. Tencent just built a second one, and it can afford to leave it unlocked.
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