Bilinear pooling has achieved state-of-the-art performance on fusing features in various machine learning tasks, owning to its ability to capture complex associations between features. Despite the success, bilinear pooling suffers from redundancy and burstiness issues, mainly due to the rank-one property of the resulting representation. In this paper, we prove that bilinear pooling is indeed a similarity-based coding-pooling formulation. This establishment then enables us to devise a new feature fusion algorithm, the factorized bilinear coding (FBC) method, to overcome the drawbacks of the bilinear pooling. We show that FBC can generate compact and discriminative representations with substantially fewer parameters. Experiments on two challenging tasks, namely image classification and visual question answering, demonstrate that our method surpasses the bilinear pooling technique by a large margin.