We are the leading Chinese language Internet search provider. Our search engine was the most frequently used search engine in China in 2006, according to a survey conducted by iResearch. Our Baidu.com website was the largest website in China and the seventh largest website globally, as measured by user traffic during the three-month period ended March 31, 2007, according to Alexa.com. We offer a Chinese language search platform, which consists of our websites and certain online application software, as well as Baidu Union, which is our network of third-party websites and software applications.

We primarily provide Chinese language Internet search services to enable users to find relevant information online, including web pages, news, images and multimedia files, through links provided on our websites.

We design and deliver our online marketing services to our P4P and tailored solutions customers based on their requirements. Our auction-based P4P services enable our customers to bid for priority placement of their links in keyword search results. We believe we were the first auction-based P4P service provider in China. Our online advertising services allow customers to use both query sensitive and non-query sensitive advertising services, including text links, graphical advertisements and other forms of online advertising. Our P4P customers are those who primarily use our auction-based P4P services, and our tailored solutions customers are those to whom we provide marketing solutions, which may consist of one or more forms of our online advertising services as well as P4P services. In the fourth quarter of 2006, we had over 108,000 active online marketing customers.

In December 2006, we announced our intention to enter the Japanese search market in 2007. We have registered the domain name www.baidu.jp and launched a limited Beta trial of our Japanese language search services in March 2007, which currently include web search and image search. (20-F, For the fiscal year ended December 31, 2006)