Core Viewpoint - The competition for traffic in the AI era is intensifying, with companies like Quark and Yuanbao taking the lead in advertising spending, while traditional search engines are being challenged by AI-driven solutions [1][3][21]. Group 1: Advertising Spending and Market Dynamics - In the first half of 2025, Quark's monthly advertising spending exceeded 100 million, peaking in June, while Yuanbao's spending in June and July surpassed 1 billion [1][3]. - DataEye reported that before February 15, the advertising material volume of Doubao and Kimi was 2-3 times that of Tencent Yuanbao, which saw a 345.1% increase in material volume in late February [3][5]. - Tencent Yuanbao's advertising spending surged from approximately 20 million in January to over 1.7 billion in July, with 70% directed towards Tencent Ads [3][5]. Group 2: User Engagement and Growth Metrics - Quark's monthly active users (MAU) increased from 148 million in February to 156 million in June, while Doubao's MAU grew from 81.98 million in February to 125 million in June [6][7]. - DeepSeek's mobile MAU reached over 100 million in April but dropped to 90 million by June, indicating volatility in user engagement [6][7]. - The overall active user count for AI-native apps reached 270 million in March 2025, with a net increase of 115 million users from January to February [6][7]. Group 3: Evolution of Search and AI Integration - The traditional search paradigm is shifting towards an AI-driven "Agent" model, where search engines are redefined as tools that provide direct answers rather than merely serving as information gateways [14][19]. - Quark's CEO stated that the search box has evolved to become a "super agent," capable of executing complex tasks beyond traditional search functions [15][19]. - Major players like Baidu and 360 are integrating AI capabilities into their search frameworks, enhancing user experience by providing comprehensive solutions rather than just search results [18][19]. Group 4: Financial Performance and Monetization Challenges - Despite the rapid growth of AI functionalities, monetization remains a challenge in the domestic market, with companies struggling to convert user engagement into revenue [23][24]. - Quark's revenue is still heavily reliant on cloud storage subscriptions, and its commitment to a "no ads" model limits its income potential [24]. - The competitive landscape suggests that the future of AI search may hinge on cash flow reserves, as companies navigate unclear commercialization paths [25].