Baidu fined RMB 50,000 for violation

Baidu was ordered to pay RMB50,000 by Shanghai
No.2 Intermediate People's Court yesterday to
recompense Dazhong Transportation and Dazhong
Moving for permitting links, which was damaging
to the companies, to be illegally available on
search pages.

The companies last year discovered that when
entering key words of Dazhong Moving into
Baidu's website an advertising column on the site
appeared, listing a number of competitors that
could take on businesses in the name of Dazhong
Moving. The column is a paid advertising service
offered by Baidu but the search engine argued
that it is merely the advertiser and was not
involved in creating the ad and cannot be held
responsible for content on other websites.

5fad not to join music alliance

5fad.com, which recently filed a lawsuit in the US
against Baidu, has decided not to join Baidu's
streaming music service, as per CEO Wu Duanping.
Over 70 music companies participate in this service,
and Baidu shares ad revenue with them.

C2C platform roadshow

Baidu has started a roadshow to promote its new
C2C service to sellers.
* Baidu C2C is a free platform, you can even get a
free domain name
* Baidu C2C generates revenue from Baidu P4P
service, i.e. keyword search results listing, and
other online ads.
* Many infrastructures and preparations are
ready, including Baidu Hi (IM tool), online payment and
logistic service.

According to its C2C promotional materials, Baidu will
help sellers to sell to targeted users based on analyzing
user profile and behavior in Baidu.

Pacific Crest out with a buy rating

In a note to clients, Pacific Crest analyst
Steve Weinstein advised clients to buy Baidu,
China's leading Internet search engine, ahead
of its second-quarter earnings report.
Weinstein said second-quarter revenues are
likely to be above the high end of the
company's previous guidance of $111 million
to $114 million, and his own estimate of
$114.5 million. Weinstein said he anticipates
raising his 2008 revenue forecast after the
company announces second-quarter earnings,
and he thinks Baidu will show 100% revenue
growth this year and next year.

Server problems

China Webmaster, 6/24/08

Industry rumors are circulating that the recent
shrinkage in the volume of Baidu's indexed
websites was caused by physical hardware problems.
Zhang Kuanxi, an engineer in Baidu's public
relations group, claims that problems have
surfaced as Baidu's physical infrastructure has
scaled less aggressively than its global strategic
development. More than 200 server clusters in
Baidu's internal file system were apparently
damaged, and over 1000 servers in these clusters
suffered physical damage to their hard drives.
This caused a large volume of data loss, and
the apparent reduction in the number of
indexed files. This problem was corrected
earlier this morning.

Baidu Hi downloaded 200,000 person-times

Baidu Hi, formally promoted a week ago has
been downloaded for more than 200,000
person-times on China's popular software
download sites like Download.sina.com.cn,
Skycn.com, Onlinedown.net, and Duote.com.

Opera makes Baidu its default search engine in China

More on the 5fad lawsuit

Chinese Internet music provider 5fad.com
has filed a lawsuit against Baidu at the
United States District Court for the
Southern District of New York.

Wu Duanping, CEO of 5fad.com said in a
statement, "This litigation will be a
cornerstone in China's intellectual property
protection cases." However since the case is
being heard across the Pacific Ocean in the
United States, it's unclear what type of
actions future plaintiffs can take against
companies that are not in some way based in
the United States.

The lawsuit focuses on copyright infringement
against Baidu.com, and the litigation seeks
relief against an ongoing infringement of
the 5fad.com's copyrights in a number of music
works. Baidu is accused of allowing Internet
users to directly listen to and download
copyright works via its website without
5fad.com's authorization.

Partnering with NBA

Baidu has teamed up with the NBA to run
the "NBA Trivia Team Grand Final"
promotion. By editing articles on Baidu's
"Baidupedia" and sharing their knowledge,
Internet users will have the opportunity
to win special NBA prizes.

A spokesperson for Baidu explained that
the promotion would run between June 6
and June 20, and to take part, users
could visit the competition's official
website,
http://www.baidu.com/search/baike/zhuti-nbatuansai,
and join a team of their choice. Within
the first 5 days, over 1,000 new articles
had been created by participants.

5fad files lawsuit in the US

5fad.com, an online digital music provider in
China announced that it has filed a lawsuit
against Baidu on June 10 at the US District
Court for the Southern District of New York.
The lawsuit focuses on copyright infringement.
The District Court has since accepted the case.

IM launched officially

Global IP Solutions is supplying the video
software solution for video chat. The GIPS
VideoEngine adapts to the available bandwidth,
which ensures that a video connection is
maintained at all times and prevents the video
from freezing.

GIPS VideoEngine works with standard or
proprietary video codec implementations and
reduces the RAM and CPU required to deliver
high quality video on computers. Baidu Hi
is integrated with a Web page keyword search
function, putting it alongside rival products
such as MSN and QQ, said Shen Haoyu, Baidu's
vice president.

"As a newcomer, we don't aim to compete with
rivals. Instead, the IM is a key component for
us to establish an online community," Shen said
during Baidu World 2008, which was held in
Shanghai.

Tencent's QQ and Microsoft's MSN lead the IM
market in China, with almost 400 million
registered users, according to Analysys
International.

As well as IM, Baidu has launched cyber games
and online forum services and will have an
online auction Website by the end of this year.

The new services aim to improve user loyalty
and profitability of the company's core search
business, according to Baidu, which has 160,000
clients in China. It has also launched a new
service which provides industry research
reports, promotion advice and market trend
prediction, besides traditional search.

Baidu world conference in Beijing on June 5

Baidu World Conference is an annual forum
hosted by Baidu. It brings together
international marketing experts, business
leaders, economists and industry analysts
to discuss the changing trends in new media.
Approximately 1500 people will be in
attendance.

Call to boycott Baidu over MP3 searches

IFPI and China audio-video recording association
decided to collectively lobby the National
Copyright Administration of China to take action
against Baidu on linking to illegal MP3 music.

Singling out Baidu as “the largest and most
incorrigible purveyor of pirated music in
China,” Qu Jing Ming, director general of
the Music Copyright Society of China, said
the alliance “realize that in order to
establish a healthy business environment it
is not enough to depend just on legal means
but also through business and administrative
initiatives, public opinion and other methods
so that eventually we will marginalize and
blacklist pirating organizations.”

International heavyweights Universal Music,
EMI and Warner-Chappell Music are participating
in the effort, along with their Chinese
counterparts Linfair Music, Linfair Music
Publishing, Seed Music, Taihe Rye Music, R2G,
Zhu Shu Fang Music and Yue Lin Music. Together,
they represent more than 80% of the Chinese
music market and a significant portion of
international mainstream music.

The recording industry claims Baidu has given
Chinese Web surfers access to links for
unlicensed music streaming and downloading
via its Web site, and earned significant
advertising revenues due to the massive online
traffic it has enjoyed as a result.