Another tale of a China internet giant taking a hit in the ed-tech market, Baidu recently shut down its educational business unit amid a round of restructuring and shifted from offering consumer-facing teaching services to cloud-based business solutions.
According to reports from Chinese media, Baidu’s educational business unit, which was originally under the emerging business group (EBG), was dismantled earlier this year. Zhang Gao, former head of the unit and an ex-researcher from Microsoft China, was transferred to Baidu’s search engine business and reports to vice president Shen Dou. EBG was previously led by Baidu’s president of New Business Zhang Yaqin, who announced he would leave the position in October.
In a statement sent to TechNode on Tuesday, Baidu said the current round of restructuring seeks to better integrate resources and promote closer collaboration within the organization. The consumer-facing education services, including file-sharing platform Wenku and mobile e-book platform Reading, are now part of the company’s content ecosystem, alongside mobile search and newsfeed services.
Also, Baidu’s online education service Chuanke will reportedly be closing soon. Baidu acquired the platform in a $30 million buyout in 2014, which was rare in the nascent Chinese online education market, reported local media.
Targeting the vocational training and K-12 tutoring segments, Baidu initially expected immediate traction in the online education market by improving recommendation algorithms to boost sales from its search engine platform.
However, earning success in the online education market requires investment in content marketing and operational staff. “There was something wrong in this technology-led approach,” (our translation) an anonymous employee told local media. The company has discontinued adding new courses to its app since July.
Baidu is not the first Chinese tech giant to struggle in the online education business. Bytedance’s English-tutoring platform Gogokid reportedly laid off hundreds of employees last month due to the high cost of user acquisition and tightened regulations.
The China’s search engine giant now is shifting its focus, offering cloud-based teaching management solutions to schools and tutoring agencies. This part of the business team was combined with Baidu’s artificial intelligence and cloud group (ACG) in this most recent round of restructuring.
It has increased efforts to serve Chinese industry players piling into cloud, and expects to earn sales revenue of RMB 10 billion ($1.45 billion) this year, more than triple the RMB 3.3 billion it earned a year ago, reported Caijing citing an unnamed employee.