360 Search Auction agents have covered 8 provinces or gradually replace Google

Due to strong pressure from performance and competitors, 360 is stepping up the commercialization of the search process. Insiders revealed that 360 of search advertising agents have covered Beijing, Shanghai and other 8 provinces and cities, 360 will gradually use their own advertising system to replace the current use of Google AdSense advertising system.

At the end of 2012, 360 quietly with Google cooperation, triggering strong outside attention, but in the details of the cooperation has remained mysterious, 360 companies only confirm the existence of partnership, but do not disclose any details of cooperation.

The Bank of America's Merrill Lynch study says 360 has been plugged into Google's commercial system since the end of 2012, but Google has only about One-third traffic, and Google's priority is less than 360 of its own advertising system if both systems have advertising requirements for the same keywords. BofA Merrill Lynch believes that 360 may be the use of Google to learn, improve their advertising system.

　　Prices are far below Baidu

A 360 insider said that 360 of the agents have covered Beijing, Shanghai, Zhejiang, Jiangsu, Guangdong, Hebei, Shandong and Henan and other 8 provinces, in most areas using the exclusive agent mode. Advertising mode is divided into "brand direct", "Search promotion" and "Guess you like" three kinds of products.

Search promotion, that is, the industry often said "bidding rankings", who bid for the key words can be ranked in the front of the natural search results, the use of effect payment mode, according to the actual effective click charges, promotional links and natural search results have a clear distinction.

Brand Direct is in the web search results at the top of the use of pictorial display form, the release of Enterprise dynamics, product information, promotional activities and other information.

Guess your favorite advertising show is in the 360 navigation, including hao.360.cn home page text chain ads and 360 film channels, joke channels, music channels, such as Picture banner ads, but also the use of effect payment mode.

360 Beijing World Exclusive agent Beijing Tiandi Online Advertising Co., Ltd. a person in charge to Sina technology, said, want to advertise in 360 search, need to open an account, the minimum cost of 4600 yuan, including 600 yuan service charge and 4000 yuan deposit.

The person in charge said, 360 in search results on the left to put up to 3 ads, on the right a total of 8, the current advertisers are relatively few, so the price is very favorable. He to the popular search term "buy a house", "second-hand housing" as an example, said, now ranked in search results only 0.6~0.7 yuan, and Baidu needs more than 10 or even dozens of yuan.

When asked about the "brand direct" and "Guess you like" The price of the two forms of advertising, he said, currently can only put "search promotion" form, the other two forms of advertising "360 temporarily not open to agents."

　　Poor profit margins, price pressures

Earlier this month, the 360 president, Xiangdong, announced that 360 of the search market share grew by 10% per cent a year to 2015, the target of 40% per cent of the market share. But now 360 of the search market share only about 11%, to achieve this goal is extremely difficult.

According to the quarterly results, 360 of the revenue was $103 million, up 65% from 62.3 million dollars in the same period last year, 84 million from the previous quarter, with net profit falling 23% from the same period last year and 15 million dollars in the previous quarter.

The operating profit margin was only 11.8%, the same period last year was 23.8%, the previous quarter was 14.5%. After the earnings, 360 shares fell for 8 consecutive days, falling from 35 to $29, or about 20% per cent. Several analysts expressed concern about the 360 per cent decline in profit margins.

T.H. Capital analysts said the 360 per cent decline was due to a major investment in search engines, which would continue to be under pressure in the future as a result of the cost of flow and operating expenses. He predicted that the 2013 profit margin for Qihoo 360 would be 27.1%, lower than 2012 's 30.2%; But the good news is that Qihoo 360 should be able to rebound in 2014.

360 Chairman Zhou Hongyi disclosed in the earnings conference call, will establish the flow union and the partner share the flow, has already contacted with several third party website, anticipated will have the greater help to the 360 search traffic promotion.

"However, the premise of the Search alliance is to do a good job of the search business, because only the commercialization can be realized in the part of the revenue and the federated partners to share." "However, in Zhou Hongyi's view, the Search alliance is only passively attracting traffic, which is garbage traffic, and will not bring value to advertisers."

"Do search is a long-term thing, we are more concerned about whether users will take the initiative to enter the 360 search page, active use to represent the search engine real market share, this flow is truly valuable." "Zhou Hongyi said.