Baidu's press release

China Central Television (”CCTV”), the largest
state-owned television network in China, reported in
its program “News in 30 Minutes” on November 15
and 16 that Baidu had been including websites of
medical companies that do not hold proper licenses in
its paid search listings for some popular medical terms,
while excluding certain websites which did not buy keywords.

Shortly after the CCTV program was broadcast, Baidu
initiated dialogue with CCTV regarding this matter.
At the same time, Baidu removed paid search listings
of certain customers, particularly medical and
pharmaceutical customers without licenses on file with
Baidu. Baidu will allow these customers to resume access
to Baidu’s P4P paid search platform once their relevant
licenses are provided to and reviewed by Baidu. These
customers account for approximately 10-15% of Baidu’s
total revenues. Baidu believes this immediate measure
is the most prudent way to protect the interests of
Baidu’s users.

Currently, it is difficult to estimate how many removed
customers will provide relevant licenses to Baidu and
when they will do so. Baidu will work closely with
customers to ensure those customers with proper
licenses will be able to access Baidu’s services again
quickly. While Baidu is currently uncertain about the
near term financial impact of this prudent measure,
Baidu does not believe it would have significant impact
on Baidu’s results in the long term. On November 17, 2008,
Baidu issued a public statement in China, acknowledging
that there could be cases where certain companies take
advantage of Baidu’s paid search platform for
questionable purposes. Baidu is committed to social
responsibility and will continue to improve its sales and
operational systems commensurate with its status as
the leading Chinese language Internet search provider.

Separately, Baidu would like to affirm that Baidu has never
excluded websites of any customers because they did not
pay for keywords, and Baidu does not tolerate such practices.