Monday, November 17, 2008

Analyst reaction: Sterne Agee positive

Sterne Agee & Leach analyst James Lee said Monday that
a report by CCTV over the weekend into medical malpractice
in China indicated some consumers may have found their way
to improperly licensed or unlicensed private clinics and health
centers via advertisements that came up when they searched
for health-related topics on Baidu. Baidu, which holds a
70 percent share of the search market in China, removed the
ads for medical practitioners that were considered questionable
over the weekend, Lee said. He sees the report as hurting Baidu's
reputation, but doesn't think it will be hurt financially as much
as Monday's share price decline seemed to indicate. Lee doesn't
think health-related ads make up that much of the company's
total advertising."The stock is obviously overreacting," he said.

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