Document and Entity Information
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12 Months Ended |
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Dec. 31, 2009
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Entity Registrant Name | Baidu, Inc. |
Entity Central Index Key | 0001329099 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2009 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Class A Ordinary Shares
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Entity Common Stock, Shares Outstanding | 26,298,960 |
Class B Ordinary Shares
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Entity Common Stock, Shares Outstanding | 8,454,332 |
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- Definition
If the value is true, then the document as an amendment to previously-filed/accepted document. No definition available.
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- Definition
End date of current fiscal year in the format --MM-DD. No definition available.
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The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements this will be the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition
The type of document being provided (such as 10-K, 10-Q, N-1A, etc). The document type should be limited to the same value as the supporting SEC submission type. The acceptable values are as follows: S-1, S-3, S-4, S-11, F-1, F-3, F-4, F-9, F-10, 6-K, 8-K, 10, 10-K, 10-Q, 20-F, 40-F, N-1A, 485BPOS, NCSR, N-Q, and Other. No definition available.
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- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Indicate number of shares outstanding of each of registrant's classes of common stock, as of latest practicable date. Where multiple classes exist define each class by adding class of stock items such as Common Class A [Member], Common Class B [Member] onto the Instrument [Domain] of the Entity Listings, Instrument No definition available.
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- Definition
Indicate "Yes" or "No" whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, or (4) Smaller Reporting Company. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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Consolidated Balance Sheets
In Thousands, unless otherwise specified |
12 Months Ended | |||||||||
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Dec. 31, 2009
USD ($)
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Dec. 31, 2009
CNY
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Dec. 31, 2008
USD ($)
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Dec. 31, 2008
CNY
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Dec. 31, 2009
Class A Ordinary Shares
USD ($)
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Dec. 31, 2009
Class A Ordinary Shares
CNY
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Dec. 31, 2008
Class A Ordinary Shares
CNY
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Dec. 31, 2009
Class B Ordinary Shares
USD ($)
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Dec. 31, 2009
Class B Ordinary Shares
CNY
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Dec. 31, 2008
Class B Ordinary Shares
CNY
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Current assets: | ||||||||||
Cash and cash equivalents | $ 615,287 | 4,199,889 | $ 346,060 | 2,362,171 | ||||||
Short-term investments | 55,839 | 381,149 | 301,244 | |||||||
Accounts receivable, net of allowance of RMB8,561 for 2008 and RMB9,015 (US$1,321) for 2009 | 23,676 | 161,610 | 92,777 | |||||||
Other assets, current | 13,341 | 91,067 | 80,007 | |||||||
Receivables from a shareholder | 0 | 0 | 10,697 | |||||||
Deferred tax assets, net | 1,342 | 9,157 | 5,580 | |||||||
Total current assets | 709,485 | 4,842,872 | 2,852,476 | |||||||
Non-current assets: | ||||||||||
Fixed assets, net | 146,143 | 997,557 | 789,714 | |||||||
Intangible assets, net | 17,960 | 122,595 | 125,783 | |||||||
Goodwill | 9,331 | 63,691 | 51,082 | |||||||
Long-term investments, net | 2,096 | 14,308 | 12,281 | |||||||
Deferred tax assets, net | 4,952 | 33,799 | 26,537 | |||||||
Other assets, non-current | 12,035 | 82,153 | 80,118 | |||||||
Total non-current assets | 192,517 | 1,314,103 | 1,085,515 | |||||||
TOTAL ASSETS | 902,002 | 6,156,975 | 3,937,991 | |||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities, current | 109,855 | 749,861 | 423,029 | |||||||
Customer advances and deposits, current | 89,047 | 607,828 | 422,526 | |||||||
Deferred revenue | 6,158 | 42,035 | 3,441 | |||||||
Deferred income | 0 | 0 | 332 | |||||||
Total current liabilities | 205,060 | 1,399,724 | 849,328 | |||||||
Non-current liabilities: | ||||||||||
Long-term payable for business acquisition | 608 | 4,150 | 0 | |||||||
Total non-current liabilities | 608 | 4,150 | 0 | |||||||
Total liabilities | 205,668 | 1,403,874 | 849,328 | |||||||
Commitments and contingencies | ||||||||||
Shareholders' equity | ||||||||||
Ordinary shares, value | 2 | 11 | 11 | 1 | 4 | 4 | ||||
Additional paid-in capital | 208,920 | 1,426,070 | 1,218,356 | |||||||
Accumulated other comprehensive loss | (16,630) | (113,513) | (109,552) | |||||||
Retained earnings | 504,041 | 3,440,529 | 1,979,844 | |||||||
Total shareholders' equity | 696,334 | 4,753,101 | 3,088,663 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 902,002 | 6,156,975 | 3,937,991 |
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- Definition
Government subsidies relating to purchased domestic equipment and that portion of deferred income is expected to be recognized as such within one year or the normal operating cycle, if longer. No definition available.
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- Definition
Accounts Payable and Accrued Liabilities, Current Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount due from customers or clients, within one year of the balance sheet date (or the normal operating cycle, whichever is longer), for goods or services (including trade receivables) that have been delivered or sold in the normal course of business, reduced to the estimated net realizable fair value by an allowance established by the entity of the amount it deems uncertain of collection. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at fiscal year-end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, and unrealized gains and losses on certain investments in debt and equity securities as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of APIC associated with common AND preferred stock. For APIC associated with only common stock, use the element Additional Paid In Capital, Common Stock. For APIC associated with only preferred stock, use the element Additional Paid In Capital, Preferred Stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold or consumed after one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. This caption alerts the reader that one or more notes to the financial statements disclose pertinent information about the entity's commitments and contingencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Dollar value of issued common stock whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The current portion, due within one year or one operating cycle, if longer, of aggregate prepayments received from customers for goods or services to be provided in the future, as well as the current portion of money or property received from customers that are to be returned upon satisfactory contract completion or as partial prepayment for goods or services to be provided in the future. No definition available.
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- Definition
The carrying amount of consideration received or receivable as of the balance sheet date on potential earnings that were not recognized as revenue in conformity with GAAP, and which are expected to be recognized as such within one year or the normal operating cycle, if longer, including sales, license fees, and royalties, but excluding interest income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The current portion of the aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. An unrecognized tax benefit that is directly related to a position taken in a tax year that results in a net operating loss carryforward should be presented as a reduction of the related deferred tax asset. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The noncurrent portion as of the balance sheet date of the aggregate carrying amount of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after the valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date. which are usually due within one year (or one business cycle). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount as of the balance sheet date, which is the cumulative amount paid, adjusted for any amortization recognized prior to adoption of FAS 142 and for any impairment charges, in excess of the fair value of net assets acquired in one or more business combination transactions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total investments in (A) an entity in which the entity has significant influence, but does not have control, (B) subsidiaries that are not required to be consolidated and are accounted for using the equity and or cost method, and (C) an entity in which the reporting entity shares control of the entity with another party or group. Includes long-term advances receivable form a party that is affiliated with the reporting entity by means of direct or indirect ownership. No definition available.
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- Definition
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. No definition available.
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- Definition
Total of all Liabilities and Stockholders' Equity items. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total obligations incurred as part of normal operations that is expected to be repaid beyond the following twelve months or one business cycle. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
Aggregate carrying amount, as of the balance sheet date, of current assets not separately presented elsewhere in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate carrying amount, as of the balance sheet date, of noncurrent assets not separately disclosed in the balance sheet due to materiality considerations. Noncurrent assets are expected to be realized or consumed after one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying value as of the balance sheet date of debt not otherwise defined (with maturities initially due after one year or beyond the operating cycle if longer), excluding current portion. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Investments which are intended to be sold in the short term (usually less than one year or the normal operating cycle, whichever is longer) including trading securities, available-for-sale securities, held-to-maturity securities, and other short-term investments not otherwise listed in the existing taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Consolidated Balance Sheets (Parenthetical)
In Thousands, except Share data, unless otherwise specified |
Dec. 31, 2009
USD ($)
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Dec. 31, 2009
CNY
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Dec. 31, 2008
CNY
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Dec. 31, 2009
Class A Ordinary Shares
USD ($)
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Dec. 31, 2008
Class A Ordinary Shares
USD ($)
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Dec. 31, 2009
Class B Ordinary Shares
USD ($)
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Dec. 31, 2008
Class B Ordinary Shares
USD ($)
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Current assets: | |||||||
Allowance for doubtful accounts receivable, current | $ 1,321 | 9,015 | 8,561 | ||||
Shareholders' equity | |||||||
Common stock, par value per share (US$) | $ 0.00005 | $ 0.00005 | $ 0.00005 | $ 0.00005 | |||
Common stock, shares authorized | 825,000,000 | 825,000,000 | 35,400,000 | 35,400,000 | |||
Common stock, shares issued | 26,298,960 | 25,641,847 | 8,454,332 | 8,873,986 | |||
Common stock, shares outstanding | 26,298,960 | 25,641,847 | 8,454,332 | 8,873,986 |
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- Definition
A valuation allowance for trade and other receivables due to an Entity within one year (or the normal operating cycle, whichever is longer) that are expected to be uncollectible. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
Face amount or stated value of common stock per share; generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Excludes common shares repurchased by the entity and held as Treasury shares. Shares outstanding equals shares issued minus shares held in treasury. Does not include common shares that have been repurchased. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Consolidated Statements of Income
In Thousands, except Share data, unless otherwise specified |
12 Months Ended | |||
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Dec. 31, 2009
USD ($)
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Dec. 31, 2009
CNY
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Dec. 31, 2008
CNY
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Dec. 31, 2007
CNY
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Revenues: | ||||
Online marketing services | $ 651,242 | 4,445,310 | 3,194,461 | 1,741,021 |
Other services | 361 | 2,466 | 3,791 | 3,404 |
Total revenues | 651,603 | 4,447,776 | 3,198,252 | 1,744,425 |
Operating costs and expenses: | ||||
Cost of revenues | (236,780) | (1,616,236) | (1,155,457) | (645,406) |
Selling, general and administrative | (117,785) | (803,988) | (659,804) | (411,163) |
Research and development | (61,913) | (422,615) | (286,256) | (140,702) |
Total operating costs and expenses | (416,478) | (2,842,839) | (2,101,517) | (1,197,271) |
Operating profit | 235,125 | 1,604,937 | 1,096,735 | 547,154 |
Other income: | ||||
Interest income | 4,785 | 32,661 | 47,677 | 49,009 |
Foreign exchange loss, net | (6) | (42) | (1,920) | (2,425) |
Loss from equity method investment | (34) | (229) | 0 | 0 |
Other income, net | 6,709 | 45,794 | 21,687 | 22,478 |
Total other income | 11,454 | 78,184 | 67,444 | 69,062 |
Income before income taxes | 246,579 | 1,683,121 | 1,164,179 | 616,216 |
Income taxes | (29,010) | (198,017) | (116,071) | 12,752 |
Net income | $ 217,569 | 1,485,104 | 1,048,108 | 628,968 |
Earnings per share for Class A and Class B ordinary shares: | ||||
Basic | $ 6.29 | 42.96 | 30.63 | 18.57 |
Diluted | $ 6.26 | 42.7 | 30.19 | 18.11 |
Weighted average number of Class A and Class B ordinary shares outstanding | ||||
Basic | 34,570,790 | 34,570,790 | 34,217,443 | 33,872,611 |
Diluted | 34,776,366 | 34,776,366 | 34,717,489 | 34,724,365 |
X | ||||||||||
- Definition
Sum of operating profit and nonoperating income (expense) before income taxes, extraordinary items, cumulative effects of changes in accounting principles, and noncontrolling interest. No definition available.
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X | ||||||||||
- Definition
Revenue from the sale of advertising time (such as television and radio) or space (newspaper or magazine pages). May also include advertising, marketing and promotional services rendered during the reporting period. No definition available.
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X | ||||||||||
- Definition
The aggregate cost of goods produced and sold and services rendered during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Total costs of sales and operating expenses for the period. No definition available.
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- Details
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- Details
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X | ||||||||||
- Definition
The amount of net income or loss for the period per each share of common stock outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The amount of net income or loss for the period per each share of common stock and dilutive common stock equivalents outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The aggregate foreign currency transaction gain or loss (both realized and unrealized) included in determining net income for the reporting period. Excludes foreign currency transactions designated as hedges of net investment in a foreign entity and intercompany foreign currency transactions that are of a long-term nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements. For certain enterprises, primarily banks, that are dealers in foreign exchange, foreign currency transaction gains or losses may be disclosed as dealer gains or losses. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Income derived from investments in debt securities and on cash and cash equivalents the earnings of which reflect the time value of money or transactions in which the payments are for the use or forbearance of money. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The portion of consolidated profit or loss for the period, net of income taxes, which is attributable to the parent. If the entity does not present consolidated financial statements, the amount of profit or loss for the period, net of income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The aggregate amount of income (expense) from ancillary business-related activities (that is to say, excluding major activities considered part of the normal operations of the business). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
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- Definition
The net amount of other nonoperating income and expense, which does not qualify for separate disclosure on the income statement under materiality guidelines. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Revenues from the sale of other goods or rendering of other services, not elsewhere specified in the taxonomy; net of (reduced by) sales adjustments, returns, allowances, and discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Total revenue from sale of goods and services rendered during the reporting period, in the normal course of business, reduced by sales returns and allowances, and sales discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate total costs related to selling a firm's product and services, as well as all other general and administrative expenses. Direct selling expenses (for example, credit, warranty, and advertising) are expenses that can be directly linked to the sale of specific products. Indirect selling expenses are expenses that cannot be directly linked to the sale of specific products, for example telephone expenses, Internet, and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, utilities, communication, etc. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The average number of shares issued and outstanding that are used in calculating diluted EPS, determined based on the timing of issuance of shares in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of [basic] shares, after adjustment for contingently issuable shares and other shares not deemed outstanding, determined by relating the portion of time within a reporting period that common shares have been outstanding to the total time in that period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Cash inflow or outflow from structured repurchase program of ordinary shares under which an upfront cash payment is made by the Entity in exchange for the right to receive the Entity's own ordinary shares or cash at a pre-determined amount at the expiration of the agreement, depending on whether the closing price of the Entity's ordinary share at the maturity date is below an appointed price. No definition available.
|
X | ||||||||||
- Definition
The net change during the period in the amount of the current portion, due within one year or one operating cycle, if longer, of aggregate prepayments received from customers for goods or services to be provided in the future, as well as the current portion of money or property received from customers that are to be returned upon satisfactory contract completion or as partial prepayment for goods or services to be provided in the future. No definition available.
|
X | ||||||||||
- Definition
The net change during the reporting period in the aggregate amount of deferred income which represents government subsidies relating to purchased domestic equipment. No definition available.
|
X | ||||||||||
- Definition
The aggregate amount of recurring noncash expense charged against earnings in the period to allocate the cost of intangible assets over their estimated remaining economic lives. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net change between the beginning and ending balance of cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The effect of exchange rate changes on cash balances held in foreign currencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate unrealized foreign currency transaction gain or loss (pretax) included in determining net income for the reporting period. Represents the aggregate of gains and losses on transactions that are unsettled as of the balance sheet date, which is therefore an adjustment to reconcile income (loss) from continuing operations to net cash provided by (used in) continuing operations. (Excludes foreign currency transactions designated as hedges of net investment in a foreign entity and intercompany foreign currency transactions that are of a long-term nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements. For certain entities, primarily banks, that are dealers in foreign exchange, foreign currency transaction gains or losses may be disclosed as dealer gains or losses.) Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
This item represents the net total realized and unrealized gain (loss) included in earnings for the period as a result of selling or holding marketable securities categorized as trading, available-for-sale, or held-to-maturity, including the unrealized holding gain or loss of held-to-maturity securities transferred to the trading security category and the cumulative unrealized gain or loss which was included in other comprehensive income (a separate component of shareholders' equity) for available-for-sale securities transferred to trading securities during the period. Additionally, this item would include any gains or losses realized during the period from the sale of investments accounted for under the cost method of accounting and losses recognized for other than temporary impairments of the subject investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The difference between the sale price or salvage price and the book value of a property, plant, and equipment asset that was sold or retired during the reporting period. This element refers to the gain (loss). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
This element represents the amount by which the carrying amount exceeds the fair value of the investment. The amount is charged to income if the decline in fair value is deemed to be other than temporary. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income, net of any cash received during the current period as refunds for the overpayment of taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net change during the reporting period in the aggregate amount of obligations and expenses incurred but not paid. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net change during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net change during the reporting period, excluding the portion taken into income, in the liability reflecting services yet to be performed by the reporting entity for which cash or other forms of consideration was received or recorded as a receivable. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate net change during the reporting period in the amount due from the following types of related parties: a parent company and its subsidiaries; subsidiaries of a common parent; an entity and trust for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; an entity and its principal owners, management, or member of their immediate families, affiliates, or other parties with the ability to exert significant influence. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net change during the reporting period in the value of this group of assets within the working capital section. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net change during the reporting period in the aggregate market value of equity or debt securities that are purchased and held principally for the purpose of selling them in the near future and benefiting from increases in prices. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net cash inflow (outflow) from financing activity for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net cash inflow (outflow) from investing activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The portion of consolidated profit or loss for the period, net of income taxes, which is attributable to the parent. If the entity does not present consolidated financial statements, the amount of profit or loss for the period, net of income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of fixed assets that an Entity acquires in a noncash (or part noncash) acquisition. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of investments that an Entity acquires in a noncash (or part noncash) acquisition. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of assets that an Entity acquires in a noncash (or part noncash) acquisition that are not presented as a separate disclosure or not otherwise listed in the existing taxonomy. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow associated with the acquisition of a business, net of the cash acquired from the purchase. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow to acquire a debt financial instrument for which the entity has the ability and intent to hold until maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow to acquire asset without physical form usually arising from contractual or other legal rights, excluding goodwill. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow associated with other investments held by the entity for investment purposes not otherwise defined in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow for acquisition of or capital improvements of property, plant and equipment, used to produce goods or deliver services, and not otherwise defined in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow associated with the development or modification of software programs or applications for internal use (that is, not to be sold, leased or otherwise marketed to others) that qualify for capitalization. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow associated with the maturity, prepayments and calls (requests for early payments) of debt securities designated as held-to-maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow associated with the amount received from holders exercising their stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of the current period expense charged against operations, the offset which is generally to the allowance for doubtful accounts for the purpose of reducing receivables, including notes receivable, to an amount that approximates their net realizable value (the amount expected to be collected). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock options, amortization of restricted stock, and adjustment for officers compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of stock that has been repurchased and retired during the period. The excess of the purchase price over par value can be charged against retained earnings (once the excess is fully allocated to additional paid in capital). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
Consolidated Statements of Shareholders' Equity
In Thousands, except Share data, unless otherwise specified |
Total
USD ($)
|
Total
CNY
|
Ordinary Shares
USD ($)
|
Ordinary Shares
CNY
|
Additional Paid-in capital
USD ($)
|
Additional Paid-in capital
CNY
|
Accumulated other comprehensive loss
USD ($)
|
Accumulated other comprehensive loss
CNY
|
Retained earnings (Accumulated losses)
USD ($)
|
Retained earnings (Accumulated losses)
CNY
|
---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2006 | 1,357,261 | 14 | 1,088,176 | (33,697) | 302,768 | |||||
Beginning Balance, shares at Dec. 31, 2006 | 33,704,399 | |||||||||
Comprehensive income: | ||||||||||
Foreign currency translation adjustment | (48,256) | (48,256) | ||||||||
Net income | 628,968 | 628,968 | ||||||||
Total comprehensive income | 580,712 | |||||||||
Exercise of share-based awards | 42,605 | 42,605 | ||||||||
Exercise of share-based awards, shares | 428,590 | |||||||||
Share-based compensation | 40,794 | 40,794 | ||||||||
Structured share repurchase | 0 | |||||||||
Repurchase of ordinary shares | 0 | |||||||||
Ending Balance at Dec. 31, 2007 | 2,021,372 | 14 | 1,171,575 | (81,953) | 931,736 | |||||
Ending Balance, shares at Dec. 31, 2007 | 34,132,989 | |||||||||
Comprehensive income: | ||||||||||
Foreign currency translation adjustment | (27,599) | (27,599) | ||||||||
Net income | 1,048,108 | 1,048,108 | ||||||||
Total comprehensive income | 1,020,509 | |||||||||
Exercise of share-based awards | 28,638 | 1 | 28,637 | |||||||
Exercise of share-based awards, shares | 382,844 | |||||||||
Share-based compensation | 86,683 | 86,683 | ||||||||
Structured share repurchase | (68,539) | (68,539) | ||||||||
Repurchase of ordinary shares | 0 | |||||||||
Ending Balance at Dec. 31, 2008 | 3,088,663 | 15 | 1,218,356 | (109,552) | 1,979,844 | |||||
Ending Balance, shares at Dec. 31, 2008 | 34,515,833 | |||||||||
Comprehensive income: | ||||||||||
Foreign currency translation adjustment | (3,961) | (3,961) | ||||||||
Net income | 217,569 | 1,485,104 | 1,485,104 | |||||||
Total comprehensive income | 1,481,143 | |||||||||
Exercise of share-based awards | 41,121 | 41,121 | ||||||||
Exercise of share-based awards, shares | 270,199 | 270,199 | ||||||||
Share-based compensation | 87,523 | 87,523 | ||||||||
Structured share repurchase | 11,584 | 79,070 | 79,070 | |||||||
Repurchase of ordinary shares | (3,577) | (24,419) | (24,419) | |||||||
Repurchase of ordinary shares, shares | (32,740) | (32,740) | ||||||||
Ending Balance at Dec. 31, 2009 | $ 696,334 | 4,753,101 | $ 3 | 15 | $ 208,920 | 1,426,070 | $ (16,630) | (113,513) | $ 504,041 | 3,440,529 |
Ending Balance, shares at Dec. 31, 2009 | 34,753,292 |
X | ||||||||||
- Definition
Cash inflow or outflow from structured repurchase program of ordinary shares under which an upfront cash payment is made by the Entity in exchange for the right to receive the Entity's own ordinary shares or cash at a pre-determined amount at the expiration of the agreement, depending on whether the closing price of the Entity's ordinary share at the maturity date is below an appointed price. No definition available.
|
X | ||||||||||
- Definition
This element represents the amount of recognized share-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Excludes common shares repurchased by the entity and held as Treasury shares. Shares outstanding equals shares issued minus shares held in treasury. Does not include common shares that have been repurchased. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The portion of consolidated profit or loss for the period, net of income taxes, which is attributable to the parent. If the entity does not present consolidated financial statements, the amount of profit or loss for the period, net of income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Adjustment that results from the process of translating subsidiary financial statements and foreign equity investments into functional currency of the reporting entity, net of tax. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares issued during the period as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value stock issued during the period as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares that have been repurchased and retired during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of stock that has been repurchased and retired during the period. The excess of the purchase price over par value can be charged against retained earnings (once the excess is fully allocated to additional paid in capital). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
Organization Consolidation and Presentation of Financial Statements
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2009
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS |
Baidu, Inc. (“Baidu” or the “Company”) was
incorporated under the laws of the Cayman Islands on
January 18, 2000. The Company was formerly known as
Baidu.com, Inc. and changed its name to Baidu, Inc. on
December 16, 2008. The Company is the 100% shareholder of
Baidu Holdings Ltd. (“Baidu Holdings”) incorporated in
the British Virgin Islands.
As of December 31, 2009, Baidu Holdings owns three
subsidiaries, details of which are as follows:
Baidu HK owns three subsidiaries in the PRC, details of which
are as follows:
Baidu Japan has established two wholly-owned subsidiaries in
Japan, details of which are as follows:
As of December 31, 2009, the Company also effectively
controls three variable interest entities (“VIEs”):
On July 13, 2009, Beijing Perusal, together with Paibo
Online (Beijing) Technology Co., Ltd. (“Paibo”), a
subsidiary of Beijing News, set up a joint venture, Beijing
Paibo Times Technology Co., Ltd. (“Paibo Times”), to
operate a community website and provide information of interest
to Beijing local residents. The registered capital of Paibo
Times is RMB5.00 million (US$0.73 million). Paibo and
Beijing Perusal hold 55% and 45% of the Paibo Times’ equity
interest, respectively. The Company accounts for its investment
in Paibo Times under the equity method.
The Company, its subsidiaries and VIEs are hereinafter
collectively referred to as the “Group.” The Group
offers Internet search solutions and online marketing solutions,
operates an
e-commerce
platform with an online payment tool which enables
e-commerce
merchants and customers to make payments online, develops and
markets scalable web application software and provides related
services. The Group’s principal geographic market is in the
PRC and Japan. The Company does not conduct any substantive
operations of its own but conducts its primary business
operations through its wholly-owned subsidiaries and VIEs in the
PRC and Japan.
PRC laws and regulations prohibit or restrict foreign ownership
of Internet content and advertising businesses. To comply with
these foreign ownership restrictions, the Group operates its
websites and provides online advertising services in the PRC
through VIEs, the PRC legal entities that were established by
the individuals authorized by the Group. The paid-in capital of
the VIEs was funded by the Group through loans extended to the
authorized individuals. The Group has entered into certain
exclusive agreements with the VIEs through Baidu Online, which
obligate Baidu Online to absorb a majority of the risk of loss
from the VIEs’ activities and entitles Baidu Online to
receive a majority of their residual returns. In addition, the
Group has entered into certain agreements with the authorized
individuals through Baidu Online, including loan agreements for
the paid-in capital of the VIEs, option agreements to acquire
the equity interests in the VIEs when permitted by the PRC laws,
and share pledge agreements for the equity interests in the VIEs
held by the authorized individuals.
Based on these contractual arrangements, the Company
consolidates the VIEs as required by Accounting Standards
Codification (“ASC”) subtopic
810-10
(“ASC
810-10”),
Consolidation: Overall (Pre-Codification: Financial
Accounting Standards Board (“FASB”) Interpretation
No. 46R, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51), because the Company
holds all the variable interests of VIEs through Baidu Online,
which is the primary beneficiary of the VIEs. Despite the lack
of technical majority ownership, there exists a
parent-subsidiary relationship between the Company and VIEs
through the aforementioned agreements, whereby the equity
holders of VIEs effectively assigned all of their voting rights
underlying their equity interest in VIEs to Baidu Online. In
addition, through the other aforementioned agreements, the
Company demonstrates its ability and intention to continue to
exercise the ability to absorb substantially all of the profits
and all of the expected losses of VIEs.
The carrying amount of the total assets of VIEs as of
December 31, 2009 was RMB611.55 million
(US$89.59 million) and there was no pledge or
collateralization of their assets. The amount of the net assets
of VIEs as of December 31, 2009 was RMB244.87 million
(US$35.87 million).
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
Summary of Significant Accounting Policies
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Dec. 31, 2009
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Principles
of Consolidation
The consolidated financial statements have been prepared in
accordance with United States generally accepted accounting
principles (“U.S. GAAP”). The consolidated
financial statements include the financial statements of the
Company, its subsidiaries and VIEs in which the Company holds
all the variable interests of VIEs through Baidu Online.
All inter-company transactions and balances between the Company,
its subsidiaries and VIEs are eliminated upon consolidation. The
Company has included the results of operations of acquired
businesses from the respective dates of acquisition.
Currency
Translation for Financial Statements Presentation
Translations of amounts from RMB into US$ for the convenience of
the reader have been calculated at the exchange rate of
RMB6.8259 per US$1.00 on December 31, 2009 as published on
the website of the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into U.S. dollars at such rate.
Foreign
Currency
The Company’s functional currency is the US$. The
Company’s subsidiaries and VIEs determine their functional
currencies based on the criteria of ASC subtopic
830-10
(“ASC
830-10”),
Foreign Currency Matters: Overall (Pre-Codification:
Statements of Financial Accounting Standards (“SFAS”)
No. 52, Foreign Currency Translation), and have
determined their functional currencies to be their respective
local currency. The Company uses the RMB as its reporting
currency. The Company uses the average exchange rate for the
year and the exchange rate at the balance sheet date to
translate its operating results and financial position
respectively. Any translation
gains (losses) are recorded in accumulated other comprehensive
income (loss) as a component of shareholders’ equity. The
Company recorded RMB48.26 million, RMB27.60 million
and RMB3.96 million (US$0.58 million) of net foreign
currency translation loss for the years ended December 31,
2007, 2008 and 2009, respectively. Transactions denominated in
foreign currencies are translated into the functional currency
at the exchange rates prevailing on the transaction dates.
Assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rates
prevailing at the balance sheet date. Exchange gains and losses
are included in the consolidated statements of income as a
component of other income.
Guarantees
The Company accounts for guarantees in accordance with ASC
subtopic
460-10
(“ASC
460-10”),
Guarantees: Overall (Pre-Codification: Financial
Accounting Standards Board (“FASB”) Interpretation
No. 45, Guarantor’s Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees to
Others, an interpretation of FASB Statements No. 5,
57 and 107 and a rescission of FASB Interpretation
No. 34). Accordingly, the Company evaluates its
guarantees to determine whether (a) the guarantee is
specifically excluded from the scope of ASC
460-10,
(b) the guarantee is subject to ASC
460-10
disclosure requirements only, but not subject to the initial
recognition and measurement provisions, or (c) the
guarantee is required to be recorded in the financial statements
at fair value.
The corporate by-laws require that the Company indemnify its
officers and directors, as well as those who act as directors
and officers of other entities at the Company’s request,
against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with any
proceedings arising out of their services to the Company. In
addition, the Company has entered into separate indemnification
agreements with each director and each executive officer of the
Company that provide for indemnification of these directors and
officers under similar circumstances and under additional
circumstances. The indemnification obligations are more fully
described in the by-laws and the indemnification agreements. The
Company purchases standard directors and officers insurance to
cover claims or a portion of the claims made against its
directors and officers. Since a maximum obligation is not
explicitly stated in the Company’s by-laws or in the
indemnification agreements and will depend on the facts and
circumstances that arise out of any future claims, the overall
maximum amount of the obligations cannot be reasonably
estimated. Historically, the Company has not been required to
make payments related to these obligations, and the fair value
for these obligations is zero in the consolidated balance sheets
as of December 31, 2008 and 2009.
The Company has no other guarantees for any of the years
presented.
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the period. Management evaluates estimates,
including those related to the accounts receivable allowances,
recoverability and useful lives of intangibles and long-lived
assets, fair values of options to purchase the Company’s
ordinary shares, and deferred tax valuation allowance, among
others. Management bases the estimates on historical experience
and on various other assumptions that are believed to be
reasonable, the results of which form the basis for making
judgments about the carrying values of assets and liabilities.
Actual results could differ from these estimates.
Fair
Value Measurements of Financial Instruments
The carrying amounts of the financial instruments, including
cash and cash equivalents, short-term investments, accounts
receivable, accounts payable and accrued liabilities, customer
advances and deposits, deferred revenue and deferred income,
approximate fair value because of their generally short
maturities.
Cash,
Cash Equivalents and Short-Term Investments
Cash and cash equivalents are stated at cost, which approximates
fair value, and primarily consist of cash and investments in
interest bearing demand deposit accounts, time deposits, highly
liquid investments and money market funds. All highly liquid
investments with original maturities of three months or less
from the date of purchase are classified as cash equivalents.
All highly liquid investments with original maturities of
greater than three months, but less than 12 months, are
classified as short-term investments which are stated at their
approximate fair value. In 2008, the Company introduced an
e-commerce
platform and an online payment platform which enables
e-commerce
merchants and customers to send and receive payments online.
Cash balances deposited by the customers of the Company’s
e-commerce
platform are included as cash and cash equivalents in the
consolidated balance sheets. The cash deposits of such nature
are considered restricted because they cannot be used for the
operations of the Group or any other purpose not designated by
customers. When customers fund their account in the
e-commerce
platform using their bank accounts, the deposited balance is
included in the Company’s bank account until customers
either use the cash to settle their online transactions or
withdraw the cash.
As of December 31, 2008 and 2009, there was
RMB4.56 million and RMB19.51 million
(US$2.86 million), respectively, in the Company’s cash
and cash equivalents balance which was related to the deposits
made by customers and designated for settlement of their online
transactions on the
e-commerce
platform.
The Company accounts for short-term investments in accordance
with ASC subtopic
320-10
(“ASC
320-10”),
Investments — Debt and Equity Securities: Overall
(Pre-Codification: SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities). The
Company classifies the short-term investments in debt and equity
securities as
“held-to-maturity”,
“trading” or
“available-for-sale”,
whose classification determines the respective accounting
methods stipulated by the accounting standard for financial
instruments. The securities that are bought and held principally
for the purpose of selling them in the near term are classified
as trading securities. The securities that the Company has
positive intent and ability to hold to maturity are classified
as
held-to-maturity
securities and stated at amortized cost. The Company did not
have
available-for-sale
securities as of any of the balance sheet date presented.
Unrealized holding gains and losses for trading securities are
included in earnings. Dividend and interest income, including
amortization of the premium and discount arising at acquisition,
for all categories of investments in securities are included in
earnings. Any realized gains or losses on the sale of the
short-term investments are determined on a specific
identification method, and such gains and losses are reflected
in the consolidated statements of income as a component of
interest income.
For individual securities classified as
held-to-maturity
securities, the Company evaluates whether a decline in fair
value below the amortized cost basis is other than temporary in
accordance with the Company’s policy and ASC subtopic
320-10
(“ASC
320-10”),
Investments — Debt and Equity Securities: Overall
(Pre-Codification: FASB Staff Position (“FSP”)
SFAS 115-1/SFAS 124-1,
The Meaning of
Other-Than-Temporary
Impairment and Its Application to Certain Investments). If
the Company concludes that it does not intend or is not required
to sell an impaired debt security before the recovery of its
amortized cost basis, the impairment is considered temporary and
the
held-to-maturity
securities continue to be recognized at the amortized costs.
When the Company intends to sell an impaired debt security or it
is more likely than not that it will be required to sell prior
to recovery of its amortized cost basis, an
other-than-temporary
impairment is deemed to have occurred. In these instances, the
other-than-temporary
impairment loss is recognized in the consolidated statements of
income equal to the entire excess of the debt security’s
amortized cost basis over its fair value at the balance sheet
date. When the Company does not intend to sell an impaired debt
security and it is more likely than not that it will not be
required to sell prior to recovery of its amortized cost basis,
the Company must determine whether or not it will recover its
amortized cost basis. If the Company concludes that it will not,
an
other-than-temporary
impairment exists and that portion of the credit loss is
recognized in the consolidated statements of income, while the
portion of loss related to all other factors is recognized in
other comprehensive income.
Long-term
Investments
Long-term investments include cost method investments and equity
method investments.
In accordance with ASC subtopic
325-20
(“ASC
325-20”),
Investments-Other: Cost Method Investments
(Pre-Codification:
Accounting Principles Board (“APB”) No. 18
(“APB 18”), The Equity Method of Accounting for
Investments in Common Stock), for investments in an investee
over which the Company does not have significant influence, the
Company carries the investment at cost and only adjusts for
other-than-temporary
declines in fair value and distributions of earnings. The
management regularly evaluates the impairment of the cost method
investments based on performance and financial position of the
investee as well as other evidence of market value. Such
evaluation includes, but is not limited to, reviewing the
investee’s cash position, recent financing, projected and
historical financial performance, cash flow forecasts and
financing needs. An impairment loss is recognized in the
consolidated statements of income equal to the excess of the
investment’s cost over its fair value at the balance sheet
date of the reporting period for which the assessment is made.
The fair value would then become the new cost basis of
investment. The impairment charge was nil, RMB7.99 million
and nil for the years ended December 31, 2007, 2008 and
2009, respectively.
Investments in entities in which the Company can exercise
significant influence but does not own a majority equity
interest or control are accounted for using the equity method of
accounting in accordance with ASC subtopic
323-10
(“ASC
323-10”),
Investments-Equity Method and Joint Ventures: Overall
(Pre-Codification: APB 18). Under the equity method, the
Company initially records its investment at cost and adjusts the
carrying amount of the investment to recognize the
Company’s proportionate share of each equity
investee’s net income or loss into consolidated statements
of income after the date of acquisition. The difference between
the cost of the equity investee and the amount of the underlying
equity in the net assets of the equity investee is recognized as
equity method goodwill included in equity method investment on
the consolidated balance sheets. The Company evaluated the
equity method investments for impairment under ASC
323-10. An
impairment loss on the equity method investments is recognized
in the consolidated statements of income when the decline in
value is determined to be
other-than-temporary.
Capitalization
of Software Developed for Internal Use
The Company has capitalized certain internal use software
development costs in accordance with ASC subtopic
350-40
(“ASC
350-40”),
Intangibles-Goodwill and Other: Internal-Use Software
(Pre-Codification: Statement of Position (“SOP”)
98-1,
Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use), amounting to
RMB6.49 million, RMB19.49 million and
RMB12.59 million (US$1.84 million) for the years ended
December 31, 2007, 2008 and 2009, respectively. The Company
capitalizes certain costs relating to software acquired,
developed, or modified solely to meet the Company’s
internal requirements and for which there are no substantive
plans to market the software. These costs mainly included
payroll and payroll-related costs for employees who are directly
associated with and who devote time to the internal use software
projects during the application development stage. The estimated
useful life of software development costs is determined to be
three years. The amortization expense for capitalized software
amounted to RMB1.26 million, RMB3.44 million and
RMB9.77 million (US$1.43 million) for the years ended
December 31, 2007, 2008 and 2009, respectively. Capitalized
internal use software costs are included in fixed assets, net.
The unamortized amount of capitalized internal use software
developed costs, which are included in fixed assets, net, is
RMB23.34 million and RMB26.16 million
(US$3.83 million) as of December 31, 2008 and 2009,
respectively.
Fixed
Assets
Fixed assets are stated at cost less accumulated depreciation.
Depreciation or amortization is recorded on a straight-line
basis over the shorter of the estimated useful lives of the
assets or the term of the related lease, as follows:
Fixed assets have no estimated residual value except for the
office building and its related facility, machinery and
equipment, which have an estimated residual value of 4% of the
cost.
Repair and maintenance costs are charged to expense as incurred,
whereas the cost of renewals and betterments that extend the
useful life of fixed assets are capitalized as additions to the
related assets. Retirements, sales and disposals of assets are
recorded by removing the cost and accumulated depreciation from
the asset and accumulated depreciation accounts with any
resulting gain or loss reflected in the consolidated statements
of income.
All direct and indirect costs that are related to the
construction of fixed assets and incurred before the assets are
ready for their intended use are capitalized as construction in
progress. Construction in progress is transferred to specific
fixed assets items and depreciation of these assets commences
when they are ready for their intended use.
Intangible
Assets
Intangible assets with finite lives are carried at cost less
accumulated amortization. The land use right is amortized using
a straight-line method over the shorter of its estimated
economic life or the term of related land use right contract.
All other intangible assets with definite lives are amortized
using the straight-line method over the estimated economic life.
As of December 31, 2009, intangible assets have weighted
average useful lives from the date of purchase as follows:
Intangible assets with an indefinite useful life are not
amortized. One of the domain name assets acquired in July 2006
is not subject to amortization, as the remaining useful life is
indefinite. The total amount assigned to this domain name is
RMB9.36 million (US$1.37 million) as of
December 31, 2009. In addition, in March 2008, the
Company’s trademark of “BAIDU” was qualified as a
China well-known trademark by the State Trademark Office. The
registration costs amounted to RMB1.05 million as of
December 31, 2008 and were recorded as an intangible asset
not subject to amortization, as the remaining useful life is
indefinite. If the intangible assets that are not being
amortized are subsequently determined to have a finite useful
life, the assets will be tested for impairment in accordance
with ASC subtopic
350-30
(“ASC
350-30”),
Intangibles-Goodwill and Other: General Intangibles Other
than Goodwill (Pre-Codification: SFAS 142, Goodwill
and Other Intangible Assets), and then amortized
prospectively over their
estimated remaining useful lives and accounted for in the same
manner as other intangible assets that are subject to
amortization. Intangible assets with indefinite useful lives are
tested for impairment annually or more frequently if events or
changes in circumstances indicate that they might be impaired.
There have been no impairment charges of the Company’s
intangible assets with indefinite useful lives in any of the
years presented.
Impairment
of Long-Lived Assets
The Company evaluates long-lived assets, such as fixed assets
and purchased or internally developed intangible assets with
finite lives, for impairment whenever events or changes in
circumstances indicate the carrying value of an asset may not be
recoverable in accordance with ASC subtopic
360-10
(“ASC
360-10”),
Property, Plant and Equipment: Overall (Pre-Codification:
SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets). When such events occur, the Company
assesses the recoverability of the assets group based on the
undiscounted future cash flow the assets group is expected to
generate and recognizes an impairment loss when estimated
undiscounted future cash flow expected to result from the use of
the assets group plus net proceeds expected from disposition of
the assets group, if any, is less than the carrying value of the
assets group. If the Company identifies an impairment, the
Company reduces the carrying amount of the assets group to its
estimated fair value based on a discounted cash flow approach
or, when available and appropriate, to comparable market values.
The Company uses estimates and judgments in its impairment tests
and if different estimates or judgments had been utilized, the
timing or the amount of any impairment charges could be
different. Asset groups to be disposed of would be reported at
the lower of the carrying amount or fair value less costs to
sell, and no longer depreciated. The assets and liabilities of a
disposal group classified as held for sale would be presented
separately in the appropriate asset and liability sections of
the balance sheet. There have been no impairment charges
relating to the Company’s long-lived assets in any of the
years presented.
Accounting
for Impairment of Goodwill
Goodwill represents the excess of the purchase price over the
fair value of the identifiable net assets acquired in a business
combination. The Company assesses goodwill for impairment in
accordance with ASC subtopic
350-20
(“ASC
350-20”),
Intangibles — Goodwill and Other: Goodwill
(Pre-Codification: SFAS 142, Goodwill and Other
Intangible Assets), which requires that goodwill be tested
for impairment at the reporting unit level at least annually and
more frequently upon the occurrence of certain events, as
defined by ASC
350-20.
Consistent with the management’s operational perspective,
the Company has determined that it has only one reporting unit
as Baidu’s chief operational decision maker only reviews
the Company’s discrete financials at its consolidated
level. Goodwill was tested for impairment in the annual
impairment tests on December 31 in each year using the two-step
process required by ASC
350-20.
First, the Company reviewed the carrying amount of the reporting
unit compared to the “fair value” of the reporting
unit based on quoted market prices of the ordinary shares. If
the fair value of the reporting unit exceeds the carrying value
of the reporting unit, goodwill is not impaired and the Company
is not required to perform further testing. If the carrying
value of the reporting unit exceeds the fair value of the
reporting unit, then the Company must perform the second step of
the impairment test in order to determine the implied fair value
of the reporting unit’s goodwill. That is, the Company
would then prepare the discounted cash flow analyses. Such
analyses are based on cash flow assumptions that are consistent
with the plans and estimates being used to manage the business.
An excess carrying value compared to fair value would indicate
that goodwill may be impaired. Finally, if the Company
determined that goodwill may be impaired, the implied fair value
of the goodwill, as defined by ASC
350-20,
would be compared to its carrying amount to determine the
impairment loss, if any. There has been no impairment of
goodwill in any of the years presented.
Accounts
Receivable and Other Receivables
Accounts receivable are recognized and carried at original
invoiced amount less an allowance for any potential
uncollectible amounts. An estimate for doubtful debts is made
when collection of the full amount is no longer probable. Bad
debts are written off as incurred. The Company generally does
not require collateral from its customers.
The Company maintains allowances for doubtful accounts for
estimated losses resulting from the failure of customers to make
payments on time. The Company reviews the accounts receivable on
a periodic basis and makes general and specific allowances when
there is doubt as to the collectibility of individual balances.
In evaluating the collectibility of individual receivable
balances, the Company considers many factors, including the age
of the balance, the customer’s historical payment history,
its current credit-worthiness and current economic trends.
Revenue
Recognition
The Company recognizes revenue based on the following principles:
Online
marketing services
(1) Auction-based
pay-for-performance
service
The Company’s auction-based
pay-for-performance
(“P4P”) platform enables a customer to place its
website link and related description on the Company’s
search result list. The customers make bids on keywords based on
how much they are willing to pay for each click to their
listings in the search results listed on the Company’s
website and the relevance between the keywords and the
customer’s businesses. Internet users’ search of the
keyword will trigger the display of the listings. The ranking of
the customer’s listing depends on both the bidding price
and the listing’s relevance to the keyword searched.
Customer pays the Company only when a user clicks on one of its
website links. Revenue is generally recognized when a user
clicks on one of the customer-sponsored website links, as there
is persuasive evidence of an arrangement, the fee is fixed or
determinable and collection is reasonably assured, as prescribed
by ASC subtopic
605-10
(“ASC
605-10”),
Revenue Recognition: Overall (Pre-Codification:
Securities and Exchange Committee (“SEC”) Staff
Accounting Bulletin (“SAB”) No. 104).
For certain P4P customers engaged through direct sales, the
Company may provide certain value-added consulting support
services to help its customers to better utilize its P4P online
marketing system. Fees for such services are generally
recognized as revenue on a pro-rata basis over the contracted
service period.
(2) Other performance-based online marketing services
To the extent the Company provides online marketing services
based on performance criteria other than click-throughs, such as
the number of telephone calls brought to its customers, the
number of users registered with its customers, or the number of
minimum click-throughs, revenue is recognized when the specified
performance criteria are met together with satisfaction of other
applicable revenue recognition criteria as prescribed by
ASC 605-10.
(3) Time-based online advertising services
For time-based online advertising services such as text links,
banners, or other forms of graphical advertisements, the Company
recognizes revenue, in accordance with ASC
605-10, on a
pro-rata basis over the contractual term commencing on the date
the customer’s advertisement is displayed in a specified
webpage. For certain time-based contractual agreements, the
Company may also provide certain performance guarantees, in
which cases revenue is recognized at the later of the completion
of the time commitment or performance guarantee.
(4) Online marketing services involving Baidu Union
Baidu Union is the program through which the Company expands
distribution of its customers’ sponsored links or
advertisements by leveraging traffic of the Baidu Union
members’ internet properties or distributing the
Company’s customers’ paid links through Union
members’ properties. The Company makes payments to Baidu
Union members for acquisition of traffic. The Company recognizes
gross revenue for the amount of fees it receives from its
customers. Payments made to Baidu Union members are included in
cost of revenues as traffic acquisition costs.
(5) Barter transactions
The Company engages in barter transactions occasionally and in
such situation follows the provisions of ASC subtopic
845-10
(“ASC
845-10”),
Nonmonetary Transactions: Overall (Pre-Codification: APB
29, Accounting for Nonmonetary Transactions). While
nonmonetary transactions are generally recorded at fair value,
if such value is not determinable within reasonable limits, the
transaction is recognized based on the carrying value of the
product or services provided. The amount of revenues recognized
for barter transactions was insignificant for each of the
periods presented.
The Company recognizes revenues for barter transactions
involving advertising in accordance with ASC subtopic
605-20
(“ASC
605-20”),
Revenue recognition: Services (Pre-Codification: Emerging
Issues Task Force (“EITF”) Issue
No. 99-17,
Accounting for Advertising Barter Transactions). However,
neither the amount recognized nor the volume of such
transactions qualified for income recognition was material for
any of the periods presented.
According to ASC subtopic
505-50
(“ASC
505-50”),
Equity: Equity-based Payments to Non-Employees
(Pre-Codification:
EITF 00-08,
Accounting by a Grantee for an Equity Instrument to Be
Received in Conjunction with Providing Goods or Services),
if the Company provides services in exchange for equity
instruments, the Company is required to measure the fair value
of those equity instruments for revenue recognition purposes as
of the earlier of either of the following dates:
If, as of the measurement date, the fair value of the equity
instruments received is not determinable within reasonable
limits, the transaction is recognized based on the fair value of
the services provided. If the fair value of both the equity
instruments received and the services provided cannot be
determined, no revenue is recognized for the services provided
and the equity instrument received is recorded at zero carrying
value. The amount of revenues recognized for such transactions
was insignificant in each of the years presented.
(6) Other revenue recognition related policies
If a sales contract stipulates more than one of the services
described in (1), (2) and (3) above (collectively the
“Services”), and the Services are considered multiple
accounting units in accordance with ASC subtopic
605-25
(“ASC
605-25”),
Revenue recognition: Multiple-Element Arrangements
(Pre-Codification: EITF Issue
No. 00-21,
Revenue Arrangements with Multiple Deliverables), the
total revenue on such arrangements is allocated to the
individual deliverables based on their relative fair values. If
sufficient vendor-specific objective evidence of fair value does
not exist for the allocation of revenue, the fee for the entire
arrangement is recognized ratably over the term of the
arrangement.
The Company engages third party distributors to deliver some of
its online marketing services to end customers. In this context,
the Company may provide cash incentives to distributors. The
cash incentives are accounted for as reduction of revenue in
accordance with ASC subtopic
605-50
(“ASC
605-50”),
Revenue recognition: Customer Payments and Incentives
(Pre-Codification: EITF Issue
No. 01-09,
Accounting for Consideration Given by a Vendor to a Customer
(Including a Reseller of the Vendor’s Products)).
Cash received in advance from customers is recorded as customer
advances and deposits. The unused cash balances remaining in
customers’ accounts are included as a liability of the
Company. Deferred revenue is recorded when services are provided
before the applicable revenue recognition criteria set forth in
ASC 605-10
are fulfilled.
Cost
of Revenues
Cost of revenues consists primarily of business taxes and
surcharges, traffic acquisition costs, bandwidth costs,
depreciation, payroll and related costs of operations.
The Company incurs business taxes and surcharges in connection
with the provision of online marketing services, technical and
consulting service fees charged by Baidu Online to VIEs and
other taxable services in the PRC. According to ASC subtopic
605-45
(“ASC
605-45”),
Revenue Recognition: Principal Agent Considerations
(Pre-Codification: EITF Issue
No. 06-03,
How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income
Statement), the Company includes the business tax and
surcharges incurred on its online marketing revenues in cost of
revenues. The business tax and surcharges in cost of revenues
for the years ended December 31, 2007, 2008 and 2009 were
RMB108.78 million, RMB200.09 million and
RMB275.92 million (US$40.42 million), respectively.
Traffic acquisition costs represent the amounts paid or payable
to Baidu Union members who direct search queries to the
Company’s websites or distribute the Company’s
customers’ paid links through their properties. These
payments are primarily based on revenue sharing arrangements
under which the Company pays its Baidu Union members a
percentage of the fees it earns from its online marketing
customers.
Advertising
Expenses
Advertising expenses, primarily advertisements through various
forms of media, are included in “Selling, general and
administrative expense” in the consolidated statements of
income and are expensed when incurred. Advertising expenses for
the years ended December 31, 2007, 2008 and 2009 were
RMB19.83 million, RMB29.22 million and
RMB77.80 million (US$11.40 million), respectively.
Research
and Development Expenses
Research and development expenses consist primarily of
personnel-related costs. The Company has expensed substantially
all development costs included in the research and development
of products and new functionality added to the existing products
as incurred, except for certain core technologies with
alternative future uses.
Other
Income
Other income consists primarily of interest income, government
subsidies, impairment and non-operating expenses. Interest
income is generated from bank deposits and other
interest-earning financial assets and is recognized on an
accrual basis. Other income, net primarily consists of financial
subsidies received from provincial and local governments for
operating a business in their jurisdictions and compliance with
specific policies promoted by the local governments. During the
years ended December 31, 2007, 2008 and 2009, the Group
received financial subsidies of RMB18.99 million,
RMB22.72 million and RMB42.50 million
(US$6.23 million), respectively, from various local PRC
government authorities. There are no defined rules and
regulations to govern the criteria necessary for companies to
receive such benefits, and the amount of financial subsidy is
determined at the discretion of the relevant government
authorities. Such amounts are recorded as other income when
received.
Leases
Leases have been classified as either capital or operating
leases. Leases that transfer substantially all the benefits and
risks incidental to the ownership of assets are accounted for as
if there was an acquisition of an asset and incurrence of an
obligation at the inception of the lease. All other leases are
accounted for as operating leases wherein rental payments are
expensed as incurred. The Company had no capital leases for the
years ended December 31, 2007, 2008 and 2009.
Income
Taxes
The Company recognizes income taxes under the liability method.
Deferred income taxes are recognized for differences between the
financial reporting and tax bases of assets and liabilities at
enacted tax rates in effect for the years in which the
differences are expected to reverse. The Company records a
valuation allowance against the amount of deferred tax assets
that it determines is not more likely than not being realized.
The effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment
date.
The Company adopted the provisions of ASC subtopic
740-10
(“ASC
740-10”),
Income Taxes: Overall
(Pre-Codification:
FIN 48, Accounting for Uncertainty in Income
Taxes — an interpretation of FASB Statement
No. 109), on January 1, 2007. ASC
740-10
clarified the accounting for uncertainty in income taxes by
prescribing the recognition threshold a tax position is required
to meet before being recognized in the financial statements. No
cumulative effect adjustment resulted from the adoption of ASC
740-10, nor
did the standard have any impact on the Company’s financial
statements for the years ended December 31, 2008 and 2009.
The Company has elected to classify interest and penalties
related to an uncertain tax position (if and when required) as
part of income tax expense in the consolidated statements of
income. As of and for the years ended December 31, 2007,
2008 and 2009, no unrecognized tax benefits or interest and
penalties associated with uncertainty in income taxes have been
recognized.
Comprehensive
Income
Comprehensive income is defined as the change in equity of the
Company during a period from transactions and other events and
circumstances excluding transactions resulting from investments
by owners and distributions to owners. Comprehensive income is
reported in the consolidated statements of shareholders’
equity. Accumulated other comprehensive loss of the Company
consists of the foreign currency translation adjustments.
Share-based
Compensation
The Company adopted ASC subtopic
718-10
(“ASC
718-10”),
Compensation-Stock Compensation: Overall
(Pre-Codification: SFAS No. 123(R), Share-Based
Payment), using the modified prospective transition approach
from January 1, 2006. Pursuant to ASC
718-10, the
Company recognized share-based compensation expense over the
requisite service periods for any share-based awards granted
after January 1, 2006 based on the fair values of all
share-based awards on the dates of grant.
The Company has elected to recognize share-based compensation
after the date of adoption of ASC
718-10 using
the straight-line method for all share-based awards issued.
Forfeitures have been estimated based on historical experience
and periodically reviewed. Cancellation of an award accompanied
by the concurrent grant of a replacement award is accounted for
as a modification of the terms of the cancelled award
(“modification awards”). The compensation costs
associated with the modification awards will be recognized if
either the original vesting condition or the new vesting
condition is achieved and the compensation costs cannot be less
than the grant-date fair value of the original award. The
incremental compensation cost was measured as the excess of the
fair value of the replacement award over the fair value of the
cancelled award at the cancellation date. Therefore, in relation
to the modification awards, the Company recognizes share-based
compensation over the vesting periods of the new options, which
comprises, (1) the amortization of the incremental portion
of share-based compensation over the remaining vesting term and
(2) plus any unrecognized compensation cost of original
award, using either the original term or the new term, whichever
is higher for each reporting period.
The Company accounts for share awards issued to non-employees in
accordance with the provisions of ASC subtopic
505-50
(“ASC
505-50”),
Equity: Equity-based Payments to Non-Employees
(Pre-Codification: EITF Issue
No. 96-18,
Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services). Under ASC
505-50, the
Company uses the Black-Scholes option
pricing model method to measure the value of options granted to
non-employees at each vesting date to determine the appropriate
charge to share-based compensation.
ASC 718-10
also requires share-based compensation to be presented in the
same manner as cash compensation rather than as a separate line
item.
Earnings
Per Share (“EPS”)
The Company computes earnings per Class A and Class B
ordinary shares in accordance with ASC subtopic
260-10
(“ASC
260-10”),
Earnings Per Share: Overall (Pre-Codification:
SFAS No. 128, Earnings per Share), using the
two class method. Under the provisions of ASC
260-10,
basic net income per share is computed using the weighted
average number of ordinary shares outstanding during the period
except that it does not include unvested ordinary shares subject
to repurchase or cancellation. Diluted net income per share is
computed using the weighted average number of ordinary shares
and, if dilutive, potential ordinary shares outstanding during
the period. Potentially dilutive securities have been excluded
from the computation of diluted net income per share if their
inclusion is anti-dilutive. Potential ordinary shares consist of
the incremental ordinary shares issuable upon the exercise of
stock options and restricted shares subject to cancellation. The
dilutive effect of outstanding stock options and restricted
shares is reflected in diluted earnings per share by application
of the treasury stock method. The computation of the diluted net
income per share of Class A ordinary shares assumes the
conversion of Class B ordinary shares, while the diluted
net income per share of Class B ordinary shares does not
assume the conversion of those shares.
The liquidation and dividend rights of the holders of the
Company’s Class A and Class B ordinary shares are
identical, except with respect to voting. As a result, and in
accordance with ASC subtopic
260-10
(“ASC
260-10”),
Earnings Per Share: Overall (Pre-Codification: EITF Issue
No. 03-06,
Participating Securities and the
Two-Class Method
under FASB Statement No. 128), the undistributed
earnings for each year are allocated based on the contractual
participation rights of the Class A and Class B
ordinary shares as if the earnings for the year had been
distributed. As the liquidation and dividend rights are
identical, the undistributed earnings are allocated on a
proportionate basis. Further, as the conversion of Class B
ordinary shares is assumed in the computation of the diluted net
income per share of Class A ordinary shares, the
undistributed earnings are equal to net income for that
computation.
For the purposes of calculating the Company’s basic and
diluted earnings per Class A and Class B ordinary
shares, the ordinary shares relating to the options that were
exercised are assumed to have been outstanding from the date of
exercise of such options.
The following table sets forth the computation of basic and
diluted net income per Class A and Class B ordinary
shares.
(Amounts in thousands of Renminbi (“RMB”), and in
thousands of U.S. Dollars (“US$”), except for
number of shares and per share data)
Recent
Accounting Pronouncements
In June 2009, the FASB issued SFAS 167, (subsequently
codified by Accounting Standards Update (“ASU”)
No. 2009-17
(“ASU
2009-17”)),
Amendments to FASB Interpretation No. 46(R), which
amends guidance regarding consolidation of variable interest
entities to address the elimination of the concept of a
qualifying special purpose entity. SFAS 167 also replaces
the quantitative-based risks and rewards calculation for
determining which enterprise has a controlling financial
interest in a variable interest entity with an approach focused
on identifying which enterprise has the power to direct the
activities of the variable interest entity, and the obligation
to absorb losses of the entity or the right to receive benefits
from the entity. Additionally, SFAS 167 requires any
enterprise that holds a variable interest in a variable interest
entity to provide enhanced disclosures that will provide users
of financial statements with more transparent information about
an enterprise’s involvement in a variable interest entity.
SFAS 167 is effective for interim and annual reporting
periods beginning after November 30, 2009. The Company does
not expect the adoption of SFAS 167 will have a material
impact on its consolidated financial statements.
In October 2009, the FASB issued ASU
No. 2009-13
(“ASU
2009-13”),
Multiple-Deliverable Revenue Arrangements. ASU
2009-13
amends ASC
sub-topic
605-25
(“ASC
605-25”),
Revenue Recognition: Multiple-Element Arrangements,
regarding revenue arrangements with multiple deliverables. These
updates addresses how to determine whether an arrangement
involving multiple deliverables contains more than one unit of
accounting, and how the arrangement consideration should be
allocated among the separate units of accounting. These updates
are effective for fiscal years beginning after June 15,
2010 and to be applied retrospectively or prospectively for new
or materially modified arrangements. In addition, early adoption
is permitted. The Company does not expect the adoption of ASU
2009-13 will
have a material impact on its consolidated financial statements.
In October 2009, the FASB issued ASU
No. 2009-14
(“ASU
2009-14”),
Certain Revenue Arrangements That Include Software
Elements. ASU
2009-14
amends the scope of ASC
sub-topic
985-605
(“ASC
985-605”),
Software: Revenue Recognition, to exclude all tangible
products containing both software and non-software components
that function together to deliver the product’s essential
functionality. ASU
2009-14 is
effective for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15,
2010 and is to be applied on a prospective basis. Early
application is permitted as of the beginning of an entity’s
fiscal year. The Company does not expect the adoption of ASU
2009-14 will
have a material impact on its consolidated financial statements.
In January 2010, the FASB issued ASU
No. 2010-06
(“ASU
2010-06”),
Fair Value Measurements and Disclosures: Improving
Disclosures about Fair Value Measurements. ASU
2010-06
amends ASC 820 to require a number of additional disclosures
regarding (1) the different classes of assets and
liabilities measured at fair value, (2) the valuation
techniques and inputs used, (3) the activity in
Level 3 fair value measurements, and (4) the transfers
between Levels 1, 2, and 3. The new disclosures and
clarifications of existing disclosures are effective for interim
and annual reporting periods beginning after December 15,
2009, except for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in
Level 3 fair value measurements. Those disclosures are
effective for fiscal years beginning after December 15,
2010, and for interim periods within those fiscal years. The
Company does not expect that the adoption of ASU
2010-06 will
have a material impact on its consolidated financial statements.
Concentration
of Risks
Concentration
of credit risk
Financial instruments that potentially subject the Company to
significant concentration of credit risk primarily consist of
cash and cash equivalents, short-term investments and accounts
receivable. The Company has RMB4.58 billion
(US$671.13 million) in cash and cash equivalents, and
short-term investments. The Company has approximately RMB
4.18 billion (US$612.78 million) in cash, bank
deposits and money market funds in the PRC, which constitute
about 91% of total cash and cash equivalents and short-term
investments. Since the global financial crisis during the third
quarter of 2008, the risk of bankruptcy of those banks in which
the Company has deposits or investments has increased
significantly. In the event of bankruptcy of one of these
financial institutions, it may be unlikely to claim its deposits
or investments back in full. The Company continues to monitor
the financial strength of the financial institutions.
Accounts receivable are typically unsecured and derived from
revenue earned from customers and agents in China, which are
exposed to credit risk. The risk is mitigated by credit
evaluations the Company performs on its customers and its
ongoing monitoring process of outstanding balances. We maintain
reserves for estimated credit losses and these losses have
generally been within our expectations.
Business
and economic risks
The Company participates in a dynamic high technology industry
and believes that changes in any of the following areas could
have a material adverse effect on the Company’s future
financial position, results of operations or cash flows: changes
in the overall demand for services and products; changes in
business offerings; competitive pressures due to new entrants;
advances and new trends in new technologies and industry
standards; changes in bandwidth suppliers; changes in certain
strategic relationships or customer relationships; regulatory
considerations; copyright regulations; and risks associated with
the Company’s ability to attract and retain employees
necessary to support its growth.
No customer or any of Baidu Union member generated greater than
10% of total revenues in any of the periods presented.
The Company’s operations could be adversely affected by
significant political, economic and social uncertainties in the
PRC.
Currency
convertibility risk
Substantially all of the Company’s businesses are
transacted in RMB, which is not freely convertible into foreign
currencies. All foreign exchange transactions take place either
through the People’s Bank of China or other banks
authorized to buy and sell foreign currencies at the exchange
rates quoted by the People’s Bank of China. Approval of
foreign currency payments by the People’s Bank of China or
other regulatory institutions requires submitting a payment
application form together with suppliers’ invoices,
shipping documents and signed contracts.
Foreign
currency exchange rate risk
The Company’s exposure to foreign currency exchange rate
risk primarily relates to cash and cash equivalents and
short-term investments denominated in the U.S. dollar. The
functional currency of the Company is US$, and the reporting
currency is RMB. Since July 21, 2005, the RMB has been
permitted to fluctuate within a narrow and managed band against
a basket of certain foreign currencies. The appreciation of the
US$ against RMB was approximately 0.05% in 2009. Any significant
revaluation of RMB may materially and adversely affect the cash
flows, revenues, earnings and financial position, and the value
of, and any dividends payable on, the ADS in U.S. dollars.
As a result, an appreciation of RMB against the U.S. dollar
would result in foreign currency translation losses when
translating the net assets of the Company from the
U.S. dollar into RMB.
The functional currency of the subsidiaries in Japan is Japanese
Yen (“JPY”), and the reporting currency is RMB. During
2009, JPY depreciated by approximately 2.4% against RMB. The
depreciation of JPY against RMB results in foreign currency
translation loss when translating the net assets into RMB.
For the years ended December 31, 2007, 2008 and 2009, the
net foreign currency translation loss resulting from the
translation from the respective functional currencies to the RMB
reporting currency recorded in the Company’s other
comprehensive loss was RMB48.26 million,
RMB27.60 million and RMB3.96 million
(US$0.58 million) respectively.
Comparative
Information
Certain items in prior years’ consolidated financial
statements have been reclassified to conform to the current
year’s presentation in accordance with the requirement
under eXtensible Business Reporting Language (“XBRL”)
to facilitate comparison.
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SHORT-TERM INVESTMENTS |
During the years ended December 31, 2007, 2008 and 2009,
the Company recorded short-term investment gains and interest
income of RMB5.25 million, RMB8.75 million and
RMB8.18 million (US$1.20 million) in the consolidated
statements of income, respectively.
As of December 31, 2008 and 2009, short-term investments of
RMB140.03 million and RMB381.15 million
(US$55.84 million), respectively, are fixed rate
investments with the original maturity of less than one year.
As of December 31, 2009, RMB346.71 million out of the
total fixed rate investments are six-month time deposits in
commercial banks and financial institutions. In addition, the
remaining RMB34.44 million of investment was initially
adjustable rate investments issued by a financial institution,
with the original maturity of less than one year. The adjustable
rate investment is structured notes in nature with an adjustable
interest rate depending on whether a reference equity-index is
within a predetermined range. During the year ended
December 31, 2009, the reference interest rate index was
outside of the predetermined range and thus the interest rate
became a fixed rate of 1% for the adjustable rate investment.
Therefore, as of December 31, 2009, such
RMB34.44 million of investment was recorded as fixed rate
investment.
As of December 31, 2008 and 2009, the fair value of
short-term investments is RMB304.25 million and
RMB381.50 million (US$55.89 million), respectively,
with respective gross unrecognized gain of RMB3.01 million
and RMB0.35 million (US$0.05 million).
The following table summarizes the estimated fair value of the
held-to-maturity
securities as of December 31, 2009 (in thousands):
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This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Accounts Receivable [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE |
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X | ||||||||||
- Details
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X | ||||||||||
- Definition
Includes disclosure of claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Other Assets, Current
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Dec. 31, 2009
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Other Assets, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS, CURRENT |
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- Details
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X | ||||||||||
- Definition
Note disclosure of claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables, and so forth. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. No definition available.
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Fixed Assets
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Fixed Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FIXED ASSETS |
The Company started the construction of its new office building
in Beijing (“Baidu Campus”) in 2007 and completed the
construction in late 2009. Direct costs related to the
construction of Baidu Campus of RMB102.05 million,
RMB172.29 million and RMB209.20 million
(US$30.65 million) were capitalized as construction in
progress for the years ended December 31, 2007, 2008 and
2009, respectively. Construction in
progress of RMB482.04 million (US$70.62 million) was
transferred to property, plant and equipment upon substantial
completion of the construction of Baidu Campus in November 2009.
The depreciation of Baidu Campus and its related facility,
machinery and equipment is calculated using the straight-line
method over their respective estimated useful life. In addition,
the remainder construction in progress of RMB8.73 million
(US$1.28 million) relating to Baidu Campus that has not yet
been placed in service for its intended use is anticipated to be
transferred to property, plant and equipment in 2010.
Depreciation expense was RMB170.13 million,
RMB259.64 million and RMB285.20 million
(US$41.78 million) for the years ended December 31,
2007, 2008 and 2009, respectively.
|
X | ||||||||||
- Definition
Disclosure of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, building and production equipment. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. This element may be used as a single block of text to include the entire PPE disclosure, including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Goodwill and Intangible Assets
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Goodwill and Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS |
In 2009, Baidu Online completed acquisitions of certain
intangible assets, including domain name, software, trademark
and non-competition agreement, that met the definition of a
business acquisition in accordance with ASC subtopic
805-10
(“ASC
805-10”),
Business Combinations: Overall (Pre-Codification:
SFAS No. 141(R), Business Combinations). The
acquisitions resulted in the increase of intangible assets and
goodwill by RMB7.54 million (US$1.10 million) and
RMB12.61 million (US$1.85 million), respectively. The
acquisitions were insignificant either individually or in the
aggregate.
The changes in the carrying amount of goodwill are as follows:
Intangible assets consist of the following:
Amortization expense for the years ended December 31, 2007,
2008 and 2009 was RMB10.29 million, RMB12.08 million
and RMB10.73 million (US$1.57 million), respectively.
Estimated amortization expense relating to the existing
intangible assets with definite lives for the each of next five
years is as follows:
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X | ||||||||||
- Definition
Discloses the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain or loss on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Accounts Payable and Accrued Liabilities, Current
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Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES, CURRENT |
The increase in accrued operating expenses resulted primarily
from the incentives accrued for advertising agents.
The increase in purchase of fixed assets was mainly due to the
construction of Baidu Campus.
The increase in traffic acquisition costs was primarily due to
the growth of revenue contribution from Baidu Union members.
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- Details
|
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- Definition
Description and amounts of accounts payable and accrued disclosure at the end of the reporting period. This element may be used for the entire disclosure as a single block of text. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Income Taxes
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Dec. 31, 2009
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
The Company is incorporated in the Cayman Islands and conducts
its primary business operations through the subsidiaries and
VIEs in the PRC and Japan. It also has intermediate holding
companies in the British Virgin Islands (“BVI”) and
Hong Kong. Under the current laws of the Cayman Islands and BVI,
the Company is not subject to tax on income or capital gains.
Additionally, upon payments of dividends by the Company to its
shareholders, no Cayman Islands and BVI withholding tax will be
imposed. Under the Hong Kong tax laws, Baidu Hong Kong is
exempted from income tax on its foreign-derived income and there
are no withholding taxes in Hong Kong on remittance of dividends.
China
Prior to January 1, 2008, the Company’s subsidiaries
and VIEs were governed by the Income Tax Law of the
People’s Republic of China concerning Foreign Investment
Enterprises (the “FIE”) and Foreign Enterprises, and
the Enterprise Income Tax (“EIT”) laws of the PRC
respectively (the “Previous EIT Law”). Under the
Previous EIT Law, the Company’s PRC subsidiaries and
VIEs were generally subjected to enterprise income taxes at a
statutory rate of 33% (30% state income tax plus 3% local income
tax) while certain preferential tax treatments were granted for
qualified businesses. The Company’s PRC subsidiaries were
entitled to preferential tax rates and special tax holidays.
On March 16, 2007, the National People’s Congress
enacted the Enterprise Income Tax Law (“the New
EIT Law”), which became effective on January 1,
2008 and has replaced the previous separate income tax laws for
domestic enterprises and FIEs by adopting a unified 25%
enterprise income tax rate applicable to all resident
enterprises in China, including FIEs and foreign enterprises
operating in the PRC, except for certain entities that still
enjoyed the tax holidays which were grandfathered by the New EIT
Law or that are entitled to tax incentives under the New EIT
Law. In accordance with the implementation rules of the New EIT
Law, a qualified “High and New Technology Enterprise”
(“HNTE”) under the New EIT Law is granted the
preferential tax rate of 15%. Baidu Online and Baidu Times are
recognized as HNTE under the New EIT Law by the relevant
authorities and applied the preferential tax rate of 15% upon
receiving the HNTE certificates on February 23, 2009.
Therefore, Baidu Online enjoys the reduced EIT rate of 15% and
Baidu Times is entitled to its remaining tax holiday granted
prior to the effectiveness of the New EIT Law. Baidu China,
being a foreign invested enterprise located in Pudong, Shanghai,
has been granted the “Software Enterprise” status and
is thereby entitled to
2-year
exemption for years 2006 and 2007 and subsequent 50% tax rate
reduction for years 2008 to 2010. According to the relevant tax
regulations provided under the New EIT Law, Baidu China, which
has been approved as a software company, is
entitled to the transitional arrangement in relation to tax rate
as stipulated in Guofa [2007] No. 39 and enjoys the gradual
increase in tax rate from 18% in 2008 to 25% in 2012.
Under the New EIT Law, dividends paid by a FIE to any of its
foreign non-resident enterprise investors are subject to a 10%
withholding tax, which were exempt under the Previous EIT Law.
Thus, the dividends, if and when payable by Baidu Online to
Baidu BVI, would be subject to 10% withholding tax. A lower tax
rate will be applied if such foreign non-resident enterprise
investor’s jurisdiction of incorporation has signed a tax
treaty or arrangement for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income
with China. There is such a tax arrangement between PRC and Hong
Kong. Thus, the dividends, if and when payable by Baidu Times
and Baidu China to Baidu HK, would be subject to 5% withholding
tax rather than statutory rate of 10% provided that Baidu HK
meets the requirements stipulated by relevant PRC tax
regulations. Furthermore, pursuant to the applicable circular
and interpretations of the New EIT Law, dividends from earnings
created prior to 2008 but distributed after 2008 are not subject
to withholding income tax.
Moreover, the New EIT Law treats enterprises established outside
of China with “effective management and control”
located in China as PRC resident enterprises for tax purposes.
The term “effective management and control” is
generally defined as exercising overall management and control
over the business, personnel, accounting, properties, etc. of an
enterprise. The Company, if considered a PRC resident enterprise
for tax purposes, would be subject to the PRC Enterprise Income
Tax at the rate of 25% on its worldwide income for the period
after January 1, 2008. As of December 31, 2009, the
Company has not accrued for PRC tax on such basis. The Company
will continue to monitor its tax status.
Japan
Baidu Japan with a paid-in capital in excess of
JPY100.00 million is subject to national income tax of 30%.
Baidu Japan is also subject to inhabitants tax, assessed by both
prefectures and municipalities. Inhabitants tax is computed as a
percentage of national income tax. The per capita tax is based
on the company’s capitalization and the number of
employees. In addition, Baidu Japan is subject to a corporate
enterprise tax on a pro forma basis based on the amount of
taxable profit subject to the corporate tax, added-value
components, (e.g. labor costs, net interest and rental payments,
income/loss for current year) and a capital component. Baidu
Japan has been in a cumulative loss position since its inception.
The Company had minimal operations in jurisdictions other than
the PRC and Japan. Income (loss) before income taxes consists of:
The pre-tax losses from non-PRC operations consists primarily of
the operating costs, administration expenses, interest income
and charges for share-based compensation. Income taxes consist
of:
In 2009 the Company received a total tax refund of
RMB55.88 million for overpaid income tax of the year 2008,
out of which RMB34.40 million was the refund for overpaid
income tax attributed to Baidu Online before it obtained the
certificate of High and New Technology Enterprise, which
provides Baidu Online with the preferential tax rate of 15% from
2008 to 2010. The remaining refund of RMB21.48 million to
Baidu China was composed of RMB7.56 million for over-paid
income tax of the year 2008 and a tax refund of
RMB13.92 million resulting from the reduced transitional
tax rate granted to Baidu China, which was credited to income
tax expense upon receipt.
The reconciliation of tax computed by applying respective
statutory income tax rate to pre-tax income is as follows
(Amounts in thousands of Renminbi (“RMB”), and in
thousands of U.S. Dollars (“US$”), except for
number of shares and per share data):
The statutory EIT rate was 33% for the year ended
December 31, 2007, and 25% for the years ended
December 31, 2008 and 2009.
Baidu Online and Baidu China enjoyed an additional tax incentive
relating to its research and development expenses. The Company
has claimed an additional tax deduction amounting to 50% of the
current year’s research
and development expenses. The amount that exceeds the current
year’s taxable profit would be carried forward for up to
the following five years in order to be utilized. In 2007, 2008
and 2009, the Company has no deductible research and development
expenses carried forward.
The Company’s effective tax rate increased in fiscal year
2009 compared with 2008, primarily due to the fact that Baidu
Times had been entitled to tax exemption for year 2008 and was
subject to 7.5% tax rate for year 2009. The Company’s
effective tax rate increased in fiscal year 2008 compared with
2007, primarily due to the fact that Baidu China had been
entitled to tax exemption for year 2007 and was subject to 9%
tax rate for year 2008. Another factor was due to the cessation
of reinvestment credit under the New EIT Law. Prior to the New
EIT Law, a foreign investor could apply for a tax refund when it
reinvested its share of accumulated profits from an existing FIE
to increase the registered capital of the existing FIE. In 2007,
Baidu Holdings obtained such a reinvestment tax refund, as it
increased the registered capital in Baidu Online by reinvesting
the retained earnings of Baidu Online. The preferential tax
refund was repealed under the New EIT Law.
The tax effects of temporary differences that give rise to the
deferred tax balance at December 31, 2008 and 2009 are as
follows:
The Company does not believe that sufficient positive evidence
exists to conclude that the recoverability of Baidu Japan and
Baidu Hong Kong’s net deferred tax assets is more likely
than not to be realized. Consequently, the Company has provided
full valuation allowances on the related net deferred tax assets.
As of December 31, 2009, the Company had net operating
losses of approximately RMB315.00 million
(US$46.00 million) from Baidu Japan, Baidu HK and BaiduPay,
which can be carried forward to offset future net profit for
income tax purposes. The Japan net operating loss will expire
beginning 2015; the PRC net operating loss will expire beginning
2014; and the HK net operating loss can be carried forward
without an expiration date.
The Company has evaluated its income tax uncertainty under ASC
740-10. ASC
740-10
clarifies the accounting for uncertainty in income taxes by
prescribing the recognition threshold a tax position is required
to meet before being recognized in the financial statements. The
Company has elected to classify interest and penalties related
to an uncertain tax position, if and when required, as part of
income tax expense in the consolidated statements of operations.
As of December 31, 2009, there is no significant tax
uncertainty impact on the Company’s financial position and
result of operations.
The Company did not provide for deferred income taxes and
foreign withholding taxes on the undistributed earnings of
foreign subsidiaries and its VIEs as of December 31, 2008
and 2009 on the basis of its intent to permanently reinvest
foreign subsidiaries’ earnings. If these foreign earnings
were to be repatriated in the future, the related tax liability
may be reduced by any foreign income taxes previously paid on
these earnings. Determination of the amount of unrecognized
deferred tax liability related to these earnings is not
practicable. In the case of its VIEs, undistributed earnings
were insignificant as of each of the balance sheet dates.
In general, the PRC and Japanese tax authorities have up to five
and seven years respectively to conduct examinations of the
Company’s tax filings. Accordingly, the PRC
subsidiaries’ tax years
2006-2009
and the Japanese subsidiary’s tax years
2006-2009
remain open to examination by the respective taxing
jurisdictions.
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- Definition
Description containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Employee Defined Contribution Plan
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12 Months Ended | ||||
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Dec. 31, 2009
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Employee Defined Contribution Plan [Abstract] | |||||
EMPLOYEE DEFINED CONTRIBUTION PLAN |
Full time employees of the Group in the PRC participate in a
government mandated
multi-employer
defined contribution plan pursuant to which certain pension
benefits, medical care, unemployment insurance, employee housing
fund and other welfare benefits are provided to employees.
Chinese labor regulations require that the Group make
contributions to the government for these benefits based on
certain percentages of the employees’ salaries. The Group
has no legal obligation for the benefits beyond the required
contributions. The total amounts for such employee benefits,
which were expensed as incurred, were RMB55.12 million,
RMB98.18 million and RMB141.84 million
(US$20.78 million) for the years ended December 31,
2007, 2008 and 2009, respectively.
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- Definition
Full time employees of the Group in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. No definition available.
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Commitments and Contingencies
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Dec. 31, 2009
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Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
Capital
commitments
The Company’s capital commitments relate primarily to
leasehold improvements. Total capital commitments contracted but
not yet reflected in the financial statements amounted to
RMB40.29 million (US$5.90 million) at
December 31, 2009. All of these capital commitments are to
be fulfilled within the next year.
Operating
lease commitments
The Company leases facilities in the PRC under non-cancelable
operating leases expiring on different dates. Payments under
operating leases are expensed on a straight-line basis over the
periods of the respective leases. Total rental expense under all
operating leases was RMB45.41 million,
RMB68.86 million and RMB84.43 million
(US$12.37 million) for the years ended December 31,
2007, 2008 and 2009, respectively.
Future minimum payments under non-cancelable operating leases
with initial terms of one-year or more consist of the following
at December 31, 2009:
Litigation
Baidu Netcom, Baidu China and Baidu Online were involved in a
number of cases pending in various courts and arbitration as of
December 31, 2009. These cases include alleged copyright
infringement, unfair competition, and defamation, among others.
Adverse results in these lawsuits may include awards of damages
and may also result in, or even compel, a change in the
Company’s business practices, which could result in a loss
of revenue or otherwise harm the business of the Company.
As of December 31, 2009, the plaintiffs associated with
various cases claimed an aggregate remedy of
RMB77.19 million (US$11.31 million). Although the
results of litigation and claims cannot be predicted with
certainty, the Company does not expect that the outcome of the
matters referred to above will result in a material adverse
effect on its business, consolidated financial position, results
of operations or cash flow.
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- Definition
Includes disclosure of commitments and contingencies. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Ordinary Shares
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12 Months Ended | ||||
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Dec. 31, 2009
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Ordinary Shares [Abstract] | |||||
ORDINARY SHARES |
Upon completion of the company’s initial public offering
(“IPO”) in August 2005, 16,648,877 Class B
Ordinary shares were issued upon conversion of all convertible
preferred shares. In addition, immediately following the closing
of the IPO, the Memorandum and Articles of Association were
amended and restated such that the authorized share capital
consisted of 870,400,000 ordinary shares at a par value of
US$0.00005 per share, of which 825,000,000 shares were
designated as Class A ordinary shares, 35,400,000 as
Class B ordinary shares, and 10,000,000 shares
designated as preferred shares. The rights of the holders of
Class A and Class B ordinary shares are identical, except
with respect to voting and conversion rights. Each share of
Class A ordinary shares is entitled to one vote per share
and is not convertible into Class B ordinary shares under
any circumstances. Each share of Class B ordinary shares is
entitled to ten votes per share and is convertible into one
Class A ordinary share at any time by the holder thereof.
Upon any transfer of Class B ordinary shares by the holder
thereof to any person or entity that is not an affiliate of such
holder, such Class B ordinary shares would be automatically
converted into an equal number of Class A ordinary shares.
There were 2,133,176, 122,856 and 419,654 Class B ordinary
shares transferred to Class A ordinary shares in 2007, 2008
and 2009, respectively.
As of December 31, 2009 there were 26,298,960 and 8,454,332
Class A and Class B ordinary shares outstanding,
respectively.
As of December 31, 2008 and 2009, there were no preferred
shares issued and outstanding.
On December 16, 2008, a resolution was passed during the
2008 annual general meeting of shareholders authorizing the
Company to repurchase its Class A ordinary shares
represented by American depositary shares (“ADSs”)
before the end of 2009. As part of its share repurchase program,
the Company entered into two types of share repurchase
arrangement with a financial institution as follows:
(a) In December 2008 and March 2009, the Company entered
into a structured share repurchase program which required the
Company to make an upfront cash payment in exchange for the
right to receive either the Company’s own ordinary shares
or cash at the expiration of the agreement, depending on the
closing price of the Company’s ordinary share at the
maturity date. Pursuant to the structured share repurchase
program, the Company made upfront payments of
US$10.00 million and US$20.00 million to the financial
institution in December 2008 and March 2009, respectively. The
upfront cash payments were recorded in shareholders’ equity
as a reduction to additional paid-in capital in accordance with
ASC subtopic
815-40
(“ASC
815-40”),
Derivatives and Hedging: Contracts in Entity’s Own
Equity (Pre-Codification: EITF Issue
No. 00-19,
Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company’s Own Stock). At
the maturity dates in March and June 2009, the Company received
its upfront cash payments with premium of US$0.84 million
and US$0.73 million, respectively, from the financial
institution. The settlement amounts of US$10.84 million and
US$20.73 million received by the Company were treated as
equity transactions and were credited to additional paid-in
capital.
(b) In December 2008 and March 2009, the Company also
entered into a preset share repurchase program which engaged the
financial institution to act as a broker on behalf of the
Company to repurchase ADSs in the open market based on a
predetermined quantity and price range. Pursuant to the preset
share repurchase program, the Company made an upfront payment of
US$10.00 million and US$20.00 million to the financial
institution in December 2008 and March 2009, respectively, to
repurchase up to an aggregate of US$10.00 million and
US$20.00 million of ADSs during an agreed period. The
Company had the right to cancel the preset repurchase program
with the financial institution at any time so long as the
Company provided a
three-day
notice to the financial institution. The upfront
US$10 million cash had no restriction otherwise and could
have been withdrawn by the Company at any time. The Company
repurchased 32,740 ordinary shares from the open
market during the agreed periods for an aggregate purchase price
of US$3.57 million, including transaction costs of
US$982.00. The repurchased shares were considered cancelled
under Cayman Islands law upon repurchase and the difference
between the par value and the repurchase price was debited to
retained earnings.
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- Definition
This element is used to capture the complete disclosure pertaining to an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation. Stock by Class includes common, convertible and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued and outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Retained Earnings
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Dec. 31, 2009
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Retained Earnings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETAINED EARNINGS |
In accordance with the Regulations on Enterprises with Foreign
Investment of China and their articles of association, the
Company’s PRC subsidiaries, being foreign invested
enterprises established in China, are required to provide for
certain statutory reserves, namely a general reserve fund, an
enterprise expansion fund, a staff welfare fund and a bonus
fund, all of which are appropriated from net profit as reported
in their PRC statutory accounts. Each of the Company’s
subsidiaries is required to allocate at least 10% of its
after-tax profits to a general reserve fund until such fund has
reached 50% of its respective registered capital. Appropriations
to the enterprise expansion fund and staff welfare and bonus
funds are at the discretion of the board of directors of the
Company’s subsidiaries.
In accordance with the China Company Laws, the Company’s
VIEs must make appropriations from their after-tax profits as
reported in their PRC statutory accounts to non-distributable
reserve funds, namely a statutory surplus fund, a statutory
public welfare fund and a discretionary surplus fund. Each of
the Company’s VIEs is required to allocate at least 10% of
its after-tax profits to the statutory surplus fund until such
fund has reached 50% of its respective registered capital.
Appropriation to the statutory public welfare fund is 5% to 10%
of the after-tax profits as reported in the PRC statutory
accounts. Effective from January 1, 2006, under the revised
China Company Laws, appropriation to the statutory public
welfare fund is no longer mandatory. Appropriations to the
discretionary surplus fund are made at the discretion of the
Company’s VIEs.
General reserve and statutory surplus funds are restricted to
set-off against losses, expansion of production and operation
and increasing registered capital of the respective company.
Staff welfare and bonus fund and statutory public welfare funds
are restricted to capital expenditures for the collective
welfare of employees. The reserves are not allowed to be
transferred to the Company in terms of cash dividends, loans or
advances, nor are they allowed for distribution except under
liquidation.
Under PRC laws and regulations, there are restrictions on the
Company’s PRC subsidiaries and VIEs with respect to
transferring certain of their net assets to the Company either
in the form of dividends, loans, or advances. Amounts restricted
include paid up capital and statutory reserve funds of the
Company’s PRC subsidiaries and the net assets of VIEs in
which the Company has no legal ownership, totaling approximately
RMB803.77 million and RMB879.43 million
(US$128.84 million) as of December 31, 2008 and 2009,
respectively.
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- Definition
Terms of any restriction upon retained earnings that arise from: (1) the aggregate preferences of the preferred shares exceeding the par or stated value of such shares upon liquidation; (2) dividend restrictions - for example, restrictions on the payment of dividends, indicating the source, the pertinent provision, and the amount of retained earnings or net income restricted or free of restrictions; (3) other appropriations; (4) any restrictions on distributions to shareholders; (5) retained earnings appropriated for loss contingencies; and (6) the amount of consolidated earnings which represents undistributed earnings of 50% or less owned by persons accounted for by the equity method. Where state laws govern circumstances under which corporations may acquire its own stock and therefore prescribe the accounting treatment, the accounting should conform to the state law if the state law is at variance with the accounting for treasury stock prescribed in APB 6 paragraph 12. Disclose the restrictions of state law related to the acquisition of stock on the availability of retained earnings for payment. No definition available.
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- Details
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Share-Based Awards Plan
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Share-Based Awards Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED AWARDS PLAN |
Incentive
Compensation Plans
In January 2000, the Company adopted the 2000 Option Plan (the
“2000 Plan”). The 2000 Plan provides for the granting
of share options and restricted ordinary shares to employees and
consultants of the Company. Options granted under the 2000 Plan
may be either incentive share options or nonqualified share
options. Incentive share options (“ISO”) may be
granted only to Company employees (including officers and
directors who are also employees). Nonqualified share options
(“NSO”) may be granted to Company employees and
consultants. The Company has reserved 5,040,000 ordinary shares
for issuance under the 2000 Plan. Under the 2000 Plan, which
expires in ten years, options granted generally vest 25% after
the first year of service and ratably each month over the
remaining
36-month
period.
Under the 2000 Plan, the employees may exercise their options
immediately, if such provisions are set forth in the award
agreement, but the Company has a right to repurchase unvested
shares at the amount equal to the original purchase price paid
by the grantee for each such share. The right to repurchase
lapses at the rate of at least twenty percent of the shares
subject to the award per year over five years from the date the
award is granted (without respect to the date the award was
exercised or became exercisable). Such repurchase right is
exercisable at any time (i) during the
90-day
period following employee termination date, or (ii) during
the 90-day
period following an exercise of the option that occurs after
employee termination date. The contractual term of options
granted is generally five years.
In December 2008, the Company amended the 2000 Plan by adding a
new section regarding adjustment of exercise price. The exercise
price per share subject to an option may be amended or adjusted
in the absolute discretion of the 2000 Plan administrator, which
is the Board of Directors, and the determination of which shall
be final, binding and conclusive. A downward adjustment of the
exercise prices shall be effective without the approval of the
Company’s shareholders or the approval of the affected
grantees.
Starting from February 15, 2006, the Company has granted
restricted Class A ordinary shares (“Restricted
Shares”) of the Company under the 2000 Plan, which
generally vest 50% after the first year of service and ratably
each month over the remaining
12-month
period. Terms for Restricted Shares are the same as share
options except that Restricted Shares do not require exercise
and generally have a two-year vesting term. The contractual term
of Restricted Shares granted is generally five years.
In December 2008, the Company adopted a share incentive plan
(the “2008 Plan”). The 2008 Plan provides for the
granting of share incentives, which include ISO, restricted
shares and any other form of award pursuant to the 2008 Plan, to
members of the board, employees and consultants of the Company.
However, the Company may grant ISOs only to its employees. The
Company has reserved 3,428,777 ordinary shares for issuance
under the 2008 Plan, which expires in ten years. The vesting
schedule, time and condition to exercise options will be
determined by the compensation committee. The term of the
options may not exceed ten years from the date of the grant,
except that five years is the maximum term of an ISO granted to
an employee who holds more than 10% of the voting power of the
Company’s share capital.
Under the 2008 Plan, the exercise price per share subject to an
option may be amended or adjusted at the discretion of the
compensation committee, and the determination of which shall be
final, binding and conclusive. To the extent not prohibited by
applicable laws or exchange rules, a downward adjustment of the
exercise prices shall be effective without the approval of the
Company’s shareholders or the approval of the affected
grantees. If the Company grants an ISO to an employee who, at
the time of that grant, owns shares representing more than 10%
of the voting power of all classes of the Company’s share
capital, the exercise price cannot be less than 110% of the fair
market value of the Company’s ordinary shares on the date
of that grant.
The following table summarizes the option activity for the year
ended December 31, 2009:
The aggregate intrinsic value in the table above represents the
difference between the Company’s closing stock price on the
last trading day in 2009 and the exercise price.
Total intrinsic value of options exercised for the three years
ended December 31, 2007, 2008 and 2009 was
RMB559.59 million, RMB465.25 million and
RMB340.13 million (US$49.83 million), respectively.
As of December 31, 2009, there was RMB36.45 million
(US$5.34 million) unrecognized share-based compensation
cost related to share options. That deferred cost is expected to
be recognized over a weighted-average vesting period of
2.60 years. To the extent the actual forfeiture rate is
different from original estimate, actual share-based
compensation costs related to these awards may be different from
the expectation.
On February 11 2009, the Company cancelled options previously
granted to certain executives with the exercise price
significantly higher than the fair market value at that time,
and concurrently re-granted the same number of options at the
then current fair market value. The vesting of the replacement
option starts from the date of grant, and all other terms remain
the same as the original option. The cancellation and re-grant
was intended to provide incentives for these executives. In
accordance with ASC
718-10, the
Company accounted for the cancellation of an award accompanied
by the concurrent grant of a replacement award as a modification
of the terms of the cancelled award. Therefore, incremental
compensation cost was measured as the excess of the fair value
of the replacement award over the fair value of the cancelled
award at the cancellation date. The total compensation cost
measured at the date of cancellation and replacement was
US$2.96 million, representing the portion of the grant-date
fair value of the original award for which the requisite service
is expected to be rendered (or has already been rendered) at
that date of US$2.36 million plus the incremental cost
resulting from the cancellation and replacement of
US$0.60 million. The cost is being amortized on a
straight-line basis over the vesting term of four years of the
replacement option.
Restricted
Shares
Restricted shares activity for the year ended December 31,
2009 was as follows:
As of December 31, 2009, there was RMB53.79 million
(US$7.88 million) unrecognized share-based compensation
cost related to restricted shares. That deferred cost will be
recognized over a weighted-average vesting period of
1.24 years. To the extent the actual forfeiture rate is
different from the original estimate, actual share-based
compensation costs related to these awards may be different from
the expectation.
The fair value of each option award was estimated on the date of
grant using the Black-Scholes Method valuation model. The
volatility assumption was estimated based on implied volatility
and historical volatility of the Company’s share price
applying the guidance provided by ASC subtopic
718-10
(“ASC
718-10”),
Compensation-Stock Compensation: Overall
(Pre-Codification: SAB 107, Share-Based Payment).
Assumptions about the expected term were based on the vesting
and contractual terms and employee demographics. The Company
considered the comparable data in 2007 and 2008 because the
Company had limited relevant historical information to support
the expected exercise behavior of employees who had been granted
options as the Company has been a public company only since
August 2005. The Company begins to estimate the volatility
assumption solely based on its historical information since
2009. The risk-free rate for periods within the contractual life
of the option is based on the U.S. Treasury yield curve in
effect at the time of grant.
The following table presents the assumptions used to estimate
the fair values of the share options granted in the periods
presented:
In addition, the Company applies an expected forfeiture rate in
determining the grant date fair value of the option grants. The
estimation of the forfeiture rate was based primarily upon
historical experience of employee turnover. To the extent the
Company revises this estimate in the future, the share-based
payments could be materially impacted in the quarter of
revision, as well as in following quarters. During the year
ended December 31, 2009, the Company decreased the
forfeiture rate for the employee group primarily due to changes
in historical employee turnover rates.
The table below summarizes the weighted average fair value and
exercise price of share options granted:
The total fair value of shares vested during the year ended
December 31, 2007, 2008 and 2009 was RMB14.86 million,
RMB37.57 million, RMB201.83 million
(US$29.57 million), respectively.
Total compensation cost recognized is as follows:
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Disclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Related Party Transactions
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Dec. 31, 2009
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Related Party Transactions [Abstract] | |||||
RELATED PARTY TRANSACTIONS |
Employees who exercise their options with cash will be required
to pay individual income tax (“IIT”) through the
Company. As of December 31, 2008, the Company accrued
withholding individual income tax for one employee, who is also
one of the major shareholders, of RMB10.70 million
(US$1.57 million). The balance was subsequently paid by the
employee to the tax authority through the Company in February
2009. No balances were due from any shareholders, officers or
directors as of December 31, 2009.
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- Definition
This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Segment Reporting
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Dec. 31, 2009
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Segment Reporting [Abstract] | |||||
SEGMENT REPORTING |
In accordance with ASC subtopic
280-10
(“ASC
280-10”),
Segment Reporting: Overall (Pre-Codification:
SFAS 131, Disclosures about segments of an Enterprise
and Related Information), the Company’s chief operating
officer relies upon consolidated results of operations when
making decisions about allocating resources and assessing
performance of the Company; hence, the Company has only one
single operating segment. The Company does not distinguish
between markets or segments for the purpose of internal
reporting.
The Company’s revenue and long-lived assets are primarily
derived from and located in the PRC and Japan.
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This element may be used to capture the complete disclosure of reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10% or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Fair Value Measurement
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Dec. 31, 2009
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Fair Value Measurement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT |
Effective January 1, 2008, the Group adopted ASC subtopic
820-10
(“ASC
820-10”),
Fair Value Measurements and Disclosures: Overall
(Pre-Codification: SFAS 157, Fair Value
Measurement). ASC
820-10
defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements.
Although the adoption of ASC
820-10 did
not impact the Group’s financial condition, results of
operations, or cash flow, ASC
820-10
requires additional disclosures to be provided on fair value
measurement.
ASC 820-10
establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value as follows:
Level 1 — Observable inputs that reflect
quoted prices (unadjusted) for identical assets or liabilities
in active markets
Level 2 — Include other inputs that are
directly or indirectly observable in the marketplace
Level 3 — Unobservable inputs which are
supported by little or no market activity
ASC 820-10
describes three main approaches to measuring the fair value of
assets and liabilities: (1) market approach;
(2) income approach and (3) cost approach. The market
approach uses prices and other relevant information generated
from market transactions involving identical or comparable
assets or liabilities. The income approach uses valuation
techniques to convert future amounts to a single present value
amount. The measurement is
based on the value indicated by current market expectations
about those future amounts. The cost approach is based on the
amount that would currently be required to replace an asset.
In accordance with ASC
820-10, the
Company measures cash equivalents and short-term investments at
fair value. Cash equivalents are classified within Level 1
or Level 2. This is because cash equivalents are valued
using either quoted market prices or discounted cash flow model
with market interest rates as discount curve. The Company’s
short-term investments were classified as
held-to-maturity
securities and stated at amortized cost. The fair value of
short-term investments was determined based on discounted cash
flow model with market interest rates as discount curve.
Assets measured at fair value on a recurring basis are
summarized below (in thousands):
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This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Subsequent Events (Unaudited)
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Subsequent Events Abstract | |||||
SUBSEQUENT EVENTS (UNAUDITED) |
On September 28, 2008, the Company entered into agreements
with UiTV, a third-party operator of an Internet television
platform in China, pursuant to which UiTV would operate the
Baidu Internet TV Channel host on the Company’s website at
movie.baidu.com. The agreements were terminated in December
2009. In February 2010, the Company and Providence Equity
Partners, a private equity firm, signed an agreement, pursuant
to which Providence Equity Partners invested
US$50.00 million in March 2010 to subscribe for convertible
redeemable preferred shares of Ding Xin, Inc., a Cayman
Islands company newly established by the Company. Ding Xin, Inc.
and entities under its control will operate the Baidu Internet
TV channel and develop an advertising supported online video
business.
On January 18, 2010, the Company entered into certain
agreements with Ku6 Holding Limited (“Ku6”) and
Hurray! Holding Co., Ltd. (“Hurray!”). Pursuant to the
agreements, Baidu agreed to exchange 8,641,975 series A
preferred shares of Ku6, which is all of Ku6 shares held by
the Company, into 12,561,924 ordinary shares of Hurray!. The
series A preferred shares of Ku6 were obtained on
December 12, 2006 by providing online market services and
the related investment had been fully impaired during 2008. The
acquired ordinary shares of Hurray! are subject to a
lock-up
period of 180 days during which the Company could not
offer, pledge, sell, contract to sell or enter into any swap or
other arrangement to transfer, in whole or in part of the shares
to others.
On January 27, 2010, the Company signed an agreement with
Rakuten, Inc. (“Rakuten”), the largest
e-commerce
website in Japan, to establish a joint venture to build a B2B2C
online shopping mall for Chinese Internet users. B2B2C refers to
an online marketplace that links and provides value-added
services to both business to business and business to consumer.
The online mall will provide customers with high-quality
merchandise from well-known Chinese and foreign brands as well
as small and medium sized enterprises at competitive prices.
According to the agreement, Rakuten will own 51% and Baidu will
own 49% of the new joint venture.
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Describes disclosed significant events or transactions that occurred after the balance sheet date, but before the issuance of the financial statements. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, losses resulting from fire or flood, losses on receivables, significant realized and unrealized gains and losses that result from changes in quoted market prices of securities, declines in market prices of inventory, changes in authorized or issued debt (SEC), significant foreign exchange rate changes, substantial loans to insiders or affiliates, significant long-term investments, and substantial dividends not in the ordinary course of business. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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