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For the realization of large models, Youdao will focus on two directions.
On February 29, NetEase Youdao (NYSE:DAO) announced its unaudited financial results for the fourth quarter of 2023 and fiscal year 2023.
According to the financial report, Youdao's net income in the fourth quarter of last year was 14800 million yuan, a year-on-year increase of 18%。Net income from continuing operations attributable to Youdao common shareholders was $56.5 million in the fourth quarter, compared with $12.3 million in the same period last year. Non-GAAP net income from continuing operations attributable to Youdao common shareholders was $69.3 million, compared to $31.1 million in the same period last year.
Net revenue for the full year of 2023 was $5.4 billion, an increase of 7% from 20225%。Net revenue from learning services was $3.1 billion, unchanged from $3.1 billion in 2022. In 2023, the net revenue from digital content services reached RMB 2 billion, a year-on-year increase of 117%。Zhou Feng, CEO of Youdao, said at the ** meeting that in 2024, digital content services will become the focus of learning services.
Smart devices net revenue was 9100 million yuan, down 276%。Regarding the challenges encountered by hardware products in 2023, Zhou Feng said that the future plan is to expand the product range to cover different first-class ranges from high-end to low-end. In addition, Youdao has restructured its sales channels and has now shifted to a more online-focused and flexible sales and chain structure. Thanks to the recommendation of Douyin Live and Dabo, the new product has gained significant impetus after its launch.
*Net revenue from marketing services was $1.3 billion, up 981%, which has achieved more than 50% year-on-year growth for five consecutive quarters. This growth is mainly due to the widespread application of artificial intelligence in the advertising industry. Youdao plans to continue to expand overseas markets in 2024, and at present, Youdao ** Marketing has established cooperation with more than 1 million Internet celebrities around the world, covering more than 75 countries and regions. In January 2024, YouDAO Ads became an authorized advertising agency for TikTok for Business.
Net loss from continuing operations attributable to Youdao common shareholders in 2023 was 5500 million yuan, compared to a net loss of 7200 million yuan. Non-GAAP net loss from continuing operations attributable to Youdao common shareholders in 2023 was 47.5 billion yuan, compared to 6400 million yuan.
Zhou Feng said: "We will continue to use the advantages of AI technology to continuously upgrade the 'Ziyue' model, further explore the application scenarios of the large model in the field of education and advertising, accelerate the implementation of products and applications, and better help users improve learning and work efficiency." In July 2023, Youdao launched the "Ziyue" education model. In November, the Ziyue model also became the first batch of education models that passed the national record. In January of this year, Youdao released "Zi Yue 20" version, launched the virtual oral language coach Hi Echo 2Version 0.
At the first meeting, when it came to the issue of large model monetization, Zhou Feng said that Youdao focused on two directions: one is to improve existing businesses and products, and the other is to launch new products. "The model has driven many of the key features of our products, bringing in the highest level of product sales or subscription revenue.
Zhou Feng said for example, on the AI learning board X20, the usage rate of the native application based on the Ziyue education model has reached nearly 40%, becoming the most popular application on X20. In addition, AIBOX has become a key feature of Youdao Dictionary and has driven an overall subscription fee increase of more than 100% for three quarters.
In terms of industry development, a number of education companies have released large models since last year. On November 7, 2023, Good Future officially announced that in accordance with the provisions of the "Interim Measures for the Management of Generative Artificial Intelligence Services", the Xueersi large model MATHGPT has completed the relevant filing and has passed the review, officially becoming the first batch of education large models that have passed the filing. At the same time, Xueersi will successively implement AI capability applications based on self-developed large models on learning machines, and MathGPT will also be fully open from the internal testing stage from November 7.
On September 2, 2023, Homework Bang released the self-developed Galaxy model, and said that the model covers multiple disciplines, multiple school stages, and multiple scenarios. In October, iFLYTEK released the iFLYTEK Xinghuo cognitive model V30, and said that in terms of education scenarios, iFLYTEK Xinghuo has made progress in active dialogue and heuristic dialogue.
While developing large models, education companies are also facing challenges. Chen Liteng, an analyst of life service e-commerce at the E-commerce Research Center of the Network Economic Society, told Yicai that for education companies, the development of large models will face challenges such as technology, cost investment, and data security. From learning machines to large models, the homogenization of the layout of education companies in the past two years is mainly due to the fact that these layouts are attractive enough for many education companies, and it is also the path for the education industry to develop towards intelligence, personalization and efficiency.