这两天百渡盈利压力很大，已经辞了两个大头了。(金融时报）

Second executive quits at Baidu

By Kathrin Hille in Beijing

Published: January 18 2010 17:00 | Last updated: January 18 2010 19:14

A Chinese woman walks past the logo of Baidu on display during an event in Beijing
Baidu warned in October that its fourth-quarter revenues would drop by up to 7%

Baidu announced the second resignation of a senior executive in 10 days on Monday, suggesting further disruptions ahead in China’s Rmb7.5bn ($1.1bn) online search market.

Li Yinan, chief technology officer, is leaving the company for personal reasons, China’s leading internet search engine said. The move follows the resignation of Peng Ye as chief operating officer on January 8.

The management changes indicate that the company is still struggling with the introduction of a new online marketing system.

At its last earnings conference in October, Baidu warned that its fourth-quarter revenues would drop by up to 7 per cent due to the reluctance of some advertising customers to use Phoenix Nest, its new platform. The system was introduced last April following criticism of Baidu’s practice of not clearly separating paid from “natural” search listings.

Last week, research showed a surprise drop of Baidu’s market share by advertising revenues. In the fourth quarter, the company’s share price was down to 58.4 per cent from 63.89 per cent, Analysys, an internet research company, said.

This dent serves as a further indication that China’s online search market leader is unlikely to win Google’s entire market share, which currently stands at about 35.6 per cent, according to Analysys, if the US internet company indeed completely pulls out of China.

Google is threatening to pull out of the country in protest over large cyber-attacks that originated in China on it and other US companies.

Wallace Cheung, analyst at Credit Suisse, wrote in a research note on Friday: “We expect Baidu to benefit from Google China’s departure but not gain the entire market share. [first] because around one-third of Google China’s revenue is from overseas advertising (non-Chinese language).

“[second] for Google China’s domestic ad revenue, we expect advertisers to only reallocate part of their spending on Google to Baidu, as Baidu Phoenix Nest keyword prices are very high, and allocating more budget to Baidu will drive keyword prices higher without return on investment improvement.

“[third] the remaining ad spending will be spent on second-tier search engines.”

Smaller search engines including Soso, operated by Tencent, Sohu’s Sougou, and Youdao, owned by Netease, have gained market share in recent months, and Taobao, the consumer site of e-commerce company Alibaba, is preparing to launch its own search engine as well.

However, some analysts said Mr Li’s resignation could be linked to other changes in Baidu’s business – he had been expected to take over as chief executive of 12580, the service hotline business of China Mobile, said Cao Junbo, chief analyst at iResearch.

Copyright The Financial Times Limited 2010.