UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2010

Commission File Number: 000-51469

BAIDU, INC.

Baidu Campus
No. 10 Shangdi 10th Street
Haidian District, Beijing 100085
The People’s Republic of China
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ		Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 23, 2010

Exhibit Index

Exhibit 99.1—Press Release

Exhibit 99.1

Baidu Announces Second Quarter 2010 Results

BEIJING, China, July 21, 2010 — Baidu, Inc. (Nasdaq: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the second quarter ended June 30, 2010¹.

Second Quarter 2010 Highlights

	•		Total revenues in the second quarter of 2010 were RMB1.914 billion ($282.3 million), a 74.4% increase from the corresponding period in 2009.
	•		Operating profit in the second quarter of 2010 was RMB971.8 million ($143.3 million), a 129.8% increase from the corresponding period in 2009.
	•		Net income in the second quarter of 2010 was RMB837.4 million ($123.5 million), a 118.5% increase from the corresponding period in 2009. Diluted earnings per ADS2 for the second quarter of 2010 was RMB2.40 ($0.35); diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the second quarter of 2010 was RMB2.46 ($0.36).

“Baidu’s record top and bottom line results reflect the healthy growth of our customer base and continued improvements in monetization efficiency,” said Robin Li, Baidu’s chairman and chief executive officer. “This quarter’s strong performance also underscores the vast Internet market opportunities for us and the growing appreciation for search engine marketing in China.”

Mr. Li added, “Baidu continues to focus on user experience and has many initiatives on this front to ensure Baidu remains at the center of China’s Internet ecosystem.”

Jennifer Li, Baidu’s chief financial officer, commented, “Effective execution resulted in impressive revenue growth and healthy margin improvements for second quarter 2010. Over the next quarters, we will continue to aggressively invest in R&D, sales and infrastructure to drive innovation, enhance monetization and support our growth.”

Second Quarter 2010 Results

Baidu reported total revenues of RMB1.914 billion ($282.3 million) for the second quarter of 2010, representing a 74.4% increase from the corresponding period in 2009.

Online marketing revenues for the second quarter of 2010 were RMB1.913 billion ($282.2 million), representing a 74.5% increase from the corresponding period in 2009. Baidu had about 254,000 active online marketing customers in the second quarter of 2010, representing a 25.1% increase from the corresponding period in 2009 and a 14.9% increase from the previous quarter. Revenue per online marketing customer for the second quarter was approximately RMB7,500 ($1,106), a 38.9% increase from the corresponding period in 2009 and a 27.1% increase from the previous quarter.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB185.6 million ($27.4 million), representing 9.7% of total revenues, as compared to 16.0% in the corresponding period in 2009 and 13.2% in the first quarter of 2010. The decrease in TAC as a percentage of total revenues is primarily due to the quality improvement of Baidu Union traffic.

Bandwidth costs as a component of cost of revenues were RMB67.9 million ($10.0 million), representing 3.5% of total revenues, compared to 4.6% in the corresponding period in 2009. Depreciation costs as a component of cost of revenues were RMB83.6 million ($12.3 million), representing 4.4% of total revenues, compared to 5.5% in the corresponding period in 2009.

Selling, general and administrative expenses were RMB265.0 million ($39.1 million), representing an increase of 47.1% from the corresponding period in 2009, primarily due to increased headcount cost and marketing expenses.

Research and development expenses were RMB159.3 million ($23.5 million), a 66.2% increase from the corresponding period in 2009. The increase was primarily due to increased R&D personnel expenses.

Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB21.6 million ($3.2 million) in the second quarter of 2010, compared to RMB19.5 million in the previous quarter and RMB22.9 million in the corresponding period in 2009.

Operating profit was RMB971.8 million ($143.3 million), representing a 129.8% increase from the corresponding period in 2009. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB 993.4 million ($146.5 million), a 122.9% increase from the corresponding period in 2009.

Income tax expense was RMB140.5 million ($20.7 million), compared to an income tax expense of RMB51.1 million in the corresponding period in 2009. The effective tax rate for the second quarter of 2010 was 14.4% as compared to 12.8% in the previous quarter and 11.8% for the corresponding period in 2009. The increase in effective tax rate was due to a new tax circular issued in the second quarter resulting in changes to the applicable tax for one of our subsidiaries in China.

Net income was RMB837.4 million ($123.5 million), representing a 118.5% increase from the corresponding period in 2009. Basic and diluted earnings per ADS for the second quarter of 2010 amounted to RMB2.41 ($0.36) and RMB2.40 ($0.35), respectively.

Net income excluding share-based compensation expenses (non-GAAP) was RMB859.0 million ($126.7 million), a 111.5% increase from the corresponding period in 2009. Basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the second quarter of 2010 amounted to RMB2.47 ($0.36) and RMB2.46 ($0.36), respectively.

As of June 30, 2010, the Company had cash, cash equivalents and short-term investments of RMB5.913 billion ($872.0 million). Net operating cash inflow and capital expenditures for the second quarter of 2010 were RMB1.240 billion ($182.8 million) and RMB181.6 million ($26.8 million), respectively.

Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses, was RMB1.104 billion ($162.8 million) for the second quarter of 2010, representing a 112.0% increase from the corresponding period in 2009.

Outlook for Third Quarter 2010

Baidu currently expects to generate total revenues in an amount ranging from RMB2.200 billion ($324.4 million) to RMB2.260 billion ($333.3 million) for the third quarter of 2010, representing a 72% to 77% year-over-year increase. This forecast reflects Baidu’s current and preliminary view, which is subject to change.

Conference Call Information

Baidu’s management will hold an earnings conference call at 8:00 PM on July 21, 2010 U.S. Eastern Time (8:00 AM on July 22, 2010 Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

US:                  +1.857.350.1676
UK:                  +44.207.365.8426
Hong Kong:   +852.3002.1672

Passcode for all regions: 91851178

A replay of the conference call may be accessed by phone at the following number until July 28, 2010:

International: +1.617.801.6888

Passcode: 25736168

Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu’s ADSs currently trade on the NASDAQ Global Select Market under the symbol “BIDU”. Each of Baidu’s Class A ordinary shares is represented by 10 ADSs.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the outlook for the third quarter 2010 and quotations from management in this announcement, as well as Baidu’s strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders,

in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about Baidu’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our growth strategies; our future business development, including development of new products and services; our ability to attract and retain users and customers; competition in the Chinese and Japanese language Internet search markets; competition for online marketing customers; changes in our revenues and certain cost or expense items as a percentage of our revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese language Internet search market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers and general economic conditions in China, Japan and elsewhere. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of July 21, 2010, and Baidu undertakes no duty to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Baidu’s consolidated financial results presented in accordance with GAAP, Baidu uses the following measures defined as non-GAAP financial measures by the SEC: adjusted EBITDA, operating profit excluding share-based compensation expenses, net income excluding share-based compensation expenses, and basic and diluted earnings per ADS excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures” and “Reconciliation from net cash provided by operating activities to adjusted EBITDA” set forth at the end of this release.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain expenses, particularly share-based compensation expenses, that may not be indicative of its operating performance or financial condition from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. Baidu has computed its non-GAAP financial measures using the same consistent method from quarter to quarter since April 1, 2006. We believe these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. A limitation of using non-GAAP adjusted EBITDA is that it does not include all items that impact our net income for the period. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures.

For investor and media inquiries, please contact:

China
Victor Tseng
Baidu, Inc.
Phone: +86-10-5992-7244
Email: ir@baidu.com

Cynthia He
Brunswick Group LLC
Phone: +86-10-6566-2256
Email: che@brunswickgroup.com

U.S.
Ms. Kate Tellier
Brunswick Group LLC
Phone: +1-212-333-3810
Email: ktellier@brunswickgroup.com

Baidu, Inc.
Condensed Consolidated Balance Sheets

		June 30,				December				June 30,
(in RMB thousands)		2010				31, 2009				2009
		Unaudited				Audited				Unaudited
ASSETS
Current assets:
Cash and cash equivalents			4,154,849				4,199,889				2,918,670
Short-term investments			1,758,412				381,149				435,624
Accounts receivable, net			198,867				161,610				134,405
Other assets, current			113,393				91,067				83,031
Deferred tax assets, net			14,413				9,157				11,168
Total current assets			6,239,934				4,842,872				3,582,898
Non-current assets:
Fixed assets, net			1,152,685				997,557				801,359
Intangible assets, net			117,562				122,595				120,079
Goodwill			63,691				63,691				54,082
Long-term investments, net			53,057				14,308				12,295
Deferred tax assets, net			33,799				33,799				27,679
Other assets, non-current			119,483				82,153				71,237
Total non-current assets			1,540,277				1,314,103				1,086,731
TOTAL ASSETS			7,780,211				6,156,975				4,669,629
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities, current			888,343				749,861				485,161
Customer advances and deposits, current			716,866				607,828				406,044
Deferred revenue			45,760				42,035				9,167
Total current liabilities			1,650,969				1,399,724				900,372
Non-current liabilities:
Long-term payable for business acquisition			4,150				4,150				—
Deferred Income, non-current			5,000				—				—
Total non-current liabilities			9,150				4,150				—
Total liabilities			1,660,119				1,403,874				900,372
Shareholders’ equity
Class A Ordinary Shares, Par value US$0.00005 per share, 825,000,000 shares authorized, and 26,298,960 shares and 26,585,811 shares issued and outstanding as at December 31, 2009 and June 30, 2010			11				11				11
Class B Ordinary Shares, Par value US$0.00005 per share, 35,400,000 shares authorized, and 8,454,332 shares and 8,214,332 shares issued and outstanding as at December 31, 2009 and June 30, 2010			4				4				4
Additional paid-in capital			1,477,570				1,426,070				1,364,543
Accumulated other comprehensive loss			(115,923	)			(113,513	)			(115,104	)
Retained earnings			4,758,430				3,440,529				2,519,803
Total shareholders’ equity			6,120,092				4,753,101				3,769,257
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			7,780,211				6,156,975				4,669,629

Baidu, Inc.
Condensed Consolidated Statements of Income

		For the Three Months Ended
		June 30,				June 30,				March 31,
(in RMB thousands except for share, per share information)		2010				2009				2010
		Unaudited				Unaudited				Unaudited
Revenues:
Online marketing services			1,913,467				1,096,624				1,293,396
Other services			927				845				519
Total revenues			1,914,394				1,097,469				1,293,915
Operating costs and expenses:
Cost of revenues (note 1, 2)			(518,336	)			(398,591	)			(426,405	)
Selling, general and administrative (note 2)			(265,003	)			(180,204	)			(214,568	)
Research and development (note 2)			(159,271	)			(95,853	)			(122,129	)
Total operating costs and expenses			(942,610	)			(674,648	)			(763,102	)
Operating profit			971,784				422,821				530,813
Other income:
Interest income			15,069				7,588				11,374
Exchange loss, net			(23	)			(1	)			(1	)
Gain and loss from equity method investments			243				—				247
Other income, net			(9,201	)			3,913				8,797
Total other income			6,088				11,500				20,417
Income before income taxes			977,872				434,321				551,230
Income taxes			(140,508	)			(51,061	)			(70,693	)
Net income			837,364				383,260				480,537
Earnings per share for Class A and Class B ordinary shares:
Basic			24.07				11.09				13.82
Diluted			23.98				11.02				13.77
Earnings per ADS (1 Class A ordinary share = 10 ADSs):
Basic			2.41				1.11				1.38
Diluted			2.40				1.10				1.38
Weighted average aggregate number of Class A and Class B ordinary shares outstanding:
Basic			34,794,808				34,571,453				34,766,823
Diluted			34,912,940				34,785,181				34,894,049
(1) Cost of revenues are detailed as follows:
Business tax and surcharges			(121,627	)			(67,877	)			(81,301	)
Traffic acquisition costs			(185,642	)			(175,445	)			(171,349	)
Bandwidth costs			(67,927	)			(50,050	)			(58,012	)
Depreciation costs			(83,627	)			(60,106	)			(65,888	)
Operational costs			(57,743	)			(43,472	)			(48,256	)
Share-based compensation expenses			(1,770	)			(1,641	)			(1,599	)
Total cost of revenues			(518,336	)			(398,591	)			(426,405	)
(2) Includes share-based compensation expenses as follows:
Cost of revenues			(1,770	)			(1,641	)			(1,599	)
Selling, general and administrative			(9,064	)			(10,912	)			(8,593	)
Research and development			(10,757	)			(10,332	)			(9,339	)
Total share-based compensation expenses			(21,591	)			(22,885	)			(19,531	)

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (*) (in RMB thousands, unaudited)

Three months ended June 30, 2009

GAAP Result

Adjustment

Non-GAAP Results

Operating profit

422,821

22,885

445,706

Three months ended June 30, 2009

GAAP Result

Adjustment

Non-GAAP Results

Net income

383,260

22,885

406,145

Three months ended March 31, 2010

GAAP Result

Adjustment

Non-GAAP Results

Operating profit

530,813

19,531

550,344

Three months ended March 31, 2010

GAAP Result

Adjustment

Non-GAAP Results

Net income

480,537

19,531

500,068

Three months ended June 30, 2010

GAAP Result

Adjustment

Non-GAAP Results

Operating profit

971,784

21,591

993,375

Three months ended June 30, 2010

GAAP Result

Adjustment

Non-GAAP Results

Net income

837,364

21,591

858,955

Reconciliation from net cash provided by operating activities to adjusted EBITDA(*) (in RMB thousands, unaudited)

		Three								Three
		months								months								Three
		ended				As a % of				ended				As a % of				months				As a %
		June 30,				total				March 31,				total				ended June				of total
		2009				revenues				2010				revenues				30, 2010				revenues
Net cash provided by operating activities			519,052				47	%			432,169				33	%			1,239,850				65	%
Changes in assets and liabilities, net of effects of acquisitions			(37,741	)			-3	%			158,711				12	%			(270,138	)			-14	%
Income taxes expenses			51,061				5	%			70,693				5	%			140,508				7	%
Interest income and other, net			(11,500	)			-1	%			(20,417	)			-2	%			(6,088	)			0	%
Adjusted EBITDA			520,872				48	%			641,156				48	%			1,104,132				58	%