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 February 2009

Commission File Number: 000-51469

BAIDU, INC.

12/F, Ideal International Plaza
No. 58 West-North 4^th Ring
Beijing 100080, 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: February 19, 2009

Exhibit Index

Exhibit 99.1—Press Release

Exhibit 99.1

Baidu Announces Fourth Quarter and Fiscal Year 2008 Results

BEIJING, China, February 18, 2009 — Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008¹.

Fourth Quarter and Fiscal Year 2008 Highlights

	•		Total revenues in the fourth quarter of 2008 were RMB902.1 million ($132.2 million), a 58.0% increase from the corresponding period in 2007.
	•		Total revenues in fiscal year 2008 were RMB3.2 billion ($468.8 million), a 83.3% increase from 2007.
	•		Operating profit in the fourth quarter of 2008 was RMB304.7 million ($44.7 million), a 72.9% increase from the corresponding period in 2007.
	•		Operating Profit in fiscal year 2008 was RMB1.1 billion ($160.7 million), a 100.4% increase from 2007.
	•		Net income in the fourth quarter of 2008 was RMB288.7 million ($42.3 million), a 31.3% increase from the corresponding period in 2007. Diluted earnings per share (“EPS”) for the fourth quarter of 2008 was RMB8.31 ($1.22); diluted EPS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2008 was RMB8.93 ($1.31). Costs and expenses related to Baidu’s Japan operations for the fourth quarter of 2008 were RMB37.0 million ($5.4 million), which reduced diluted EPS by RMB1.06 ($0.16).
	•		Net income in fiscal year 2008 was RMB1.0 billion ($153.6 million), representing a 66.6% increase from 2007. Diluted EPS for 2008 was RMB30.19 ($4.43); diluted EPS excluding share-based compensation expenses (non-GAAP) for 2008 was RMB32.61 ($4.78). Costs and expenses related to Baidu’s Japan operations for 2008 were RMB129.3 million ($19.0 million), which reduced diluted EPS by RMB3.72 ($0.55).
	•		The number of active online marketing customers during the fourth quarter was over 197,000, an increase of 1.5% from the previous quarter.

“Having gone through this important quarter, Baidu has become a stronger company with a higher quality customer base, tighter operational controls and more confidence in our ability to overcome

challenges,” said Robin Li, Baidu’s chairman and CEO. “Looking forward, we will continue to execute on the strategies we have put in place to drive traffic and monetization in these difficult economic times. As the leader in this high-growth market, we remain confident in our business model and long-term potential.”

Jennifer Li, Baidu’s chief financial officer, commented, “Going into 2009, we will continue to focus on growing the top line and taking a disciplined approach to costs while making investments for long term gains, particularly in the areas of user experience, monetization, sales efficiency and branding.”

Fourth Quarter 2008 Results

Baidu reported total revenues of RMB902.1 million ($132.2 million) for the fourth quarter of 2008, representing a 58% increase from the corresponding period in 2007.

Online marketing revenues for the fourth quarter of 2008 were RMB901.4 million ($132.1 million), representing a 58.3% increase from the fourth quarter of 2007. Baidu had more than 197,000 active online marketing customers in the fourth quarter of 2008, representing a 1.5% increase from the previous quarter and a 27.1% increase from the corresponding period in 2007. Revenue per online marketing customer for the fourth quarter was approximately RMB4,600 ($674), a sequential decrease of 2.1% and a 24.3% increase from the corresponding period in 2007. The sequential decrease in revenue per customer was primarily due to a portion of customers in the medical and pharmaceutical sector being temporarily removed from paid search results during the quarter. A large portion of these customers have resumed using our services since then.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB131.4 million ($19.3 million), representing 14.6% of total revenues, as compared to 12.7% in the corresponding period in 2007 and 11.8% in the third quarter of 2008. The increase in TAC as a percentage of total revenues both in part reflects the growth in our Baidu Union business and also a one-time adjustment, without which TAC for this quarter would have been 13.9% of total revenues.

Bandwidth costs as a component of cost of revenues were RMB49.2 million ($7.2 million), representing 5.5% of total revenues, compared to 6.3% in the corresponding period in 2007. Depreciation costs as a component of cost of revenues were RMB57.9 million ($8.5 million), representing 6.4% of total revenues, compared to 8.2% in the corresponding period in 2007. The decrease in bandwidth and depreciation costs as percentages of total revenues reflects efficiency improvement as well as increased scalability of investment in capital expenditure.

Selling, general and administrative expenses were RMB175.3 million ($25.7 million), representing an increase of 32.6% from the corresponding period in 2007, primarily due to the increase in compensation and marketing expenses.

Research and development expenses were RMB85.5 million ($12.5 million), representing an 83.8% increase from the corresponding period in 2007, primarily due to headcount increase.

Share-based compensation expenses, which were allocated to related operating cost and expense line items, increased in aggregate by 61.8% to RMB21.5 million ($3.2 million) in the fourth quarter of 2008 from RMB13.3 million in the corresponding period in 2007. The increase in share-based compensation expenses primarily reflects increase in grants to employees.

Operating profit was RMB304.7 million ($44.7 million), representing a 72.9% increase from the corresponding period in 2007. Operating profit excluding share-based compensation expenses
(non-GAAP) was RMB326.2 million ($47.8 million) for the fourth quarter of 2008, a 72.1% increase from the corresponding period in 2007.

Income tax expense was RMB41.8 million ($6.1 million), compared to an income tax benefit of RMB18.6 million for the corresponding period in 2007. The effective tax rate increased from 9.1% in the third quarter to 12.7% in the fourth quarter of 2008, primarily due to catch-up of the applicable tax rate for one of our subsidiaries in China in accordance with certain PRC tax interpretations issued in the fourth quarter. The effective tax rate for the full year 2008 was 10%.

Net income was RMB288.7 million ($42.3 million), representing a 31.3% increase from the corresponding period in 2007. Basic and diluted EPS for the fourth quarter of 2008 amounted to RMB8.39 ($1.23) and RMB8.31 ($1.22), respectively.

Net income excluding share-based compensation expenses (non-GAAP) was RMB310.2 million ($45.5 million), a 33% increase from the corresponding period in 2007. Basic and diluted EPS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2008 were RMB9.02 ($1.32) and RMB8.93 ($1.31), respectively.

As of December 31, 2008, the Company had cash, cash equivalents and short-term investments of RMB2.7 billion ($390.4 million). Net operating cash inflow and capital expenditures for the fourth quarter of 2008 were RMB482.1 million ($70.7 million) and RMB61.4 million ($9.0 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 RMB398.9 million ($58.5 million) for the fourth quarter of 2008, representing a 61.5% increase from the corresponding period in 2007.

Fiscal Year 2008 Results

Total revenues in 2008 were RMB3.2 billion ($468.8 million), representing an 83.3% increase from 2007.

Online marketing revenues in 2008 were RMB3.2 billion ($468.2 million), representing an 83.5% increase from 2007. The growth was driven by increases in both the number of active online marketing customers and revenue per customer. Baidu had more than 284,000 active online

marketing customers in 2008, representing a 32.7% increase from 2007. Revenue per online marketing customer for 2008 was RMB11,200 ($1,642), an increase of 38.3% from 2007.

Traffic acquisition costs in 2008 were RMB418.5 million ($61.3 million), representing 13.1% of total revenues, compared to 11.7% in 2007. The increase in TAC as a percentage of total revenues reflects the continued growth of revenue contribution from Baidu Union members.

Selling, general and administrative expenses in 2008 were RMB659.8 million ($96.7 million), representing an increase of 60.5% from the previous year, mainly due to the increase in compensation and marketing expenses.

Research and development expenses totaled RMB286.3 million ($42.0 million) in 2008, representing a 103.4% increase from 2007 primarily due to an increase in research and development staff.

Operating profit in 2008 was RMB1.1 billion ($160.8 million), a 100.4% increase from 2007. Operating profit excluding share-based compensation expenses (non-GAAP) in 2008 was RMB1.2 billion ($173.1 million), representing a 101.1% increase from 2007.

Net income in 2008 was RMB1.0 billion ($153.6 million), representing a 66.6% increase from 2007. Basic and diluted EPS for 2008 amounted to RMB30.63 ($4.49) and RMB30.19 ($4.43), respectively.

Net income excluding share-based compensation expenses (non-GAAP) in 2008 was RMB1.1 billion ($165.9 million), reflecting a 69.3% increase from 2007. Basic and diluted EPS excluding share-based compensation expenses (non-GAAP) in 2008 were RMB33.09 ($4.85) and RMB32.61 ($4.78), respectively.

Full year net operating cash inflow and capital expenditures were RMB1.6 billion ($236.9 million) and RMB417.9 million ($61.3 million), respectively.

Adjusted EBITDA (non-GAAP) was RMB1.5 billion ($214.2 million) in 2008, representing a 90.3% increase from 2007.

Outlook for First Quarter 2009

We expect moderate year-over-year growth for the first quarter of 2009 due to two factors. First, we anticipate a portion of our online marketing customers may scale back on marketing spending given the current market environment. Second, we expect that the removal of certain sponsored links during the fourth quarter of 2008 resulted in a net loss of around 5% of revenue, impacting the first quarter.

Given the above considerations, Baidu currently expects to generate total revenues in an amount ranging from RMB780 million ($114 million) to RMB800 million ($117 million) for the first

quarter of 2009, representing a 36% to 39% increase from the corresponding period in 2008. 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 PM on February 18, 2009 U.S. Eastern Standard Time (9 AM on February 19, 2009 Beijing/Hong Kong time).

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

US: +1.617.614.2704
UK: +44.207.365.8426
Hong Kong: +852.3002.1672

Passcode for all regions: 55283502

A replay of the conference call may be accessed by phone at the following number until 10 PM on February 25, 2009 U.S. Eastern Standard Time.

International: +1.617.801.6888
Passcode: 72328702

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, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol “BIDU”.

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 first quarter 2009 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 third 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, results of operations and financial condition; our ability to attract and retain users and customers; competition in the Chinese language Internet search market; 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 copyright and other 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 content 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 February 19, 2009, 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 EPS 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 and expenditures that may not be indicative of its operating performance 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 non-GAAP operating profit excluding share-based compensation expenses, net income excluding share-based compensation expenses, and basic and diluted EPS

excluding share-based compensation expenses 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 business. 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 non-GAAP financial measures.

For investor inquiries please contact:

Linda Sun
Baidu, Inc.
Tel: 86-10-8262-1188
ir@baidu.com

For investor and media inquiries please contact:

China

Cynthia He
Brunswick Group (Beijing)
Tel: 86-10-6566-2256
che@brunswickgroup.com

U.S.

Mike Guerin
Brunswick Group (New York)
Tel: 1-212-333-3810
mguerin@brunswickgroup.com

Baidu, Inc.
Condensed Consolidated Balance Sheets

		December 31				September 30				December 31,
(in RMB thousands)		2008				2008				2007
		Unaudited				Unaudited				Audited
ASSETS
Current assets:
Cash and cash equivalents			2,362,171				2,088,554				1,350,600
Short-term investments			301,244				206,360				242,037
Accounts receivable, net			92,777				100,193				64,274
Prepaid expenses and other current assets			90,704				109,597				65,996
Deferred tax assets, net			5,580				2,587				2,587
Total current assets			2,852,476				2,507,291				1,725,494
Non-current assets:
Fixed assets, net			789,714				748,582				678,886
Land use right, net			94,520				95,008				96,472
Intangible assets, net			31,263				33,814				40,460
Goodwill			51,082				51,081				51,093
Investments, net			12,281				20,197				15,439
Deferred tax assets, net			26,537				17,060				15,716
Other non-current assets			80,118				84,394				32,348
Total non-current assets			1,085,515				1,050,136				930,414
TOTAL ASSETS			3,937,991				3,557,427				2,655,908
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accrued expenses and other liabilities			423,029				371,745				359,310
Customers’ deposits			422,526				357,884				257,577
Deferred revenue			3,441				9,149				11,832
Deferred income			332				633				2,485
Total current liabilities			849,328				739,411				631,204
Non-current liabilities:
Long-term payable			—				—				3,000
Deferred income			—				—				332
Total non-current liabilities			—				—				3,332
Total liabilities			849,328				739,411				634,536
Shareholders’ equity
Class A Ordinary Shares, Par value US$0.00005 per share, 825,000,000 shares authorized, and 25,136,147 shares and 25,641,847 shares issued and outstanding as at December 31, 2007 and December 31, 2008			11				11				10
Class B Ordinary Shares, Par value US$0.00005 per share, 35,400,000 shares authorized, and 8,996,842 shares and 8,873,986 shares issued and outstanding as at December 31, 2007 and December 31, 2008			4				4				4
Additional paid-in capital			1,218,356				1,254,593				1,171,575
Accumulated other comprehensive loss			(109,552	)			(127,770	)			(81,953	)
Retained earnings			1,979,844				1,691,178				931,736
Total shareholders’ equity			3,088,663				2,818,016				2,021,372
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			3,937,991				3,557,427				2,655,908

Baidu, Inc.
Condensed Consolidated Statements of Income

		For the Three Months Ended												Twelve Months Ended
		December 31,				December 31,				September 30,				December 31,				December 31,
(in RMB thousands except for share, per share information)		2008				2007				2008				2008				2007
		Unaudited				Unaudited				Unaudited				Unaudited				Audited
Revenues:
Online marketing services			901,389				569,588				918,179				3,194,461				1,741,021
Other services			731				1,474				946				3,791				3,404
Total revenues			902,120				571,062				919,125				3,198,252				1,744,425
Operating costs and expenses:
Cost of revenues (note 1, 2)			(336,543	)			(216,012	)			(309,342	)			(1,155,457	)			(645,406	)
Selling, general and administrative (note 2)			(175,313	)			(132,230	)			(163,247	)			(659,804	)			(411,163	)
Research and development (note 2)			(85,541	)			(46,535	)			(78,231	)			(286,256	)			(140,702	)
Total operating costs and expenses			(597,397	)			(394,777	)			(550,820	)			(2,101,517	)			(1,197,271	)
Operating profit			304,723				176,285				368,305				1,096,735				547,154
Other income:
Interest income			15,320				12,846				11,375				47,677				49,009
Exchange loss, net			(2	)			(1,898	)			(5	)			(1,920	)			(2,425	)
Other income, net			10,451				14,044				3,009				21,687				22,478
Total other income			25,769				24,992				14,379				67,444				69,062
Income before income taxes			330,492				201,277				382,684				1,164,179				616,216
Income taxes			(41,826	)			18,561				(34,825	)			(116,071	)			12,752
Net income			288,666				219,838				347,859				1,048,108				628,968
Earnings per share for Class A and Class B ordinary shares:
Basic			8.39				6.45				10.15				30.63				18.57
Diluted			8.31				6.32				10.00				30.19				18.11
Weighted average aggregate number of Class A and Class B ordinary shares outstanding:
Basic			34,392,036				34,087,848				34,257,974				34,217,443				33,872,611
Diluted			34,740,057				34,797,946				34,786,353				34,717,489				34,724,365
(1) Cost of revenues are detailed as follows:
Business tax and surcharges			(58,215	)			(36,614	)			(57,288	)			(200,085	)			(108,783	)
Traffic acquisition costs			(131,352	)			(72,299	)			(108,797	)			(418,474	)			(204,693	)
Bandwidth costs			(49,245	)			(35,857	)			(48,029	)			(178,651	)			(117,554	)
Depreciation costs			(57,908	)			(46,662	)			(56,907	)			(225,799	)			(147,115	)
Operational costs			(38,317	)			(23,820	)			(37,379	)			(127,906	)			(65,544	)
Share-based compensation expenses			(1,506	)			(760	)			(942	)			(4,542	)			(1,717	)
Total cost of revenues			(336,543	)			(216,012	)			(309,342	)			(1,155,457	)			(645,406	)
(2) Includes share-based compensation expenses as follows:
Cost of revenues			(1,506	)			(760	)			(942	)			(4,542	)			(1,717	)
Selling, general and administrative			(10,220	)			(5,539	)			(6,933	)			(41,651	)			(17,371	)
Research and development			(9,765	)			(6,986	)			(9,149	)			(37,784	)			(20,760	)
Total share-based compensation expenses			(21,491	)			(13,285	)			(17,024	)			(83,977	)			(39,848	)

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

Three months ended

Three months ended

Three months ended

Twelve months ended

Twelve months ended

December 31, 2007

September 30, 2008

December 31, 2008

December 31, 2008

December 31, 2007

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Operating profit

176,285

13,285

189,570

368,305

17,024

385,329

304,723

21,491

326,214

1,096,735

83,977

1,180,712

547,154

39,848

587,002

Three months ended

Three months ended

Three months ended

Twelve months ended

Twelve months ended

December 31, 2007

September 30, 2008

December 31, 2008

December 31, 2008

December 31, 2007

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Result

Adjustment

Results

Net income

219,838

13,285

233,123

347,859

17,024

364,883

288,666

21,491

310,157

1,048,108

83,977

1,132,085

628,968

39,848

668,816

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

		Three months ended				As a % of		Three months ended				As a % of		Three months ended				As a % of		Twelve months ended				As a % of		Twelve months ended				As a % of
		December 31, 2007				total revenues		September 30, 2008				total revenues		December 31, 2008				total revenues		December 31, 2008				total revenues		December 31, 2007				total revenues
Net cash provided by operating activities			334,609			59%			482,172			52%			482,108			53%			1,616,534			50%			979,478			56%
Changes in assets and liabilities, net of effects of acquisitions			(44,063	)		-8%			(45,293	)		-5%			(99,277	)		-11%			(203,736	)		-6%			(129,713	)		-7%
Income taxes expenses			(18,561	)		-3%			34,825			4%			41,826			5%			116,071			4%			(12,752	)		-1%
Interest income and other, net			(24,992	)		-4%			(14,379	)		-1%			(25,769	)		-3%			(67,444	)		-2%			(69,062	)		-4%
Adjusted EBITDA			246,993			44%			457,325			50%			398,888			44%			1,461,425			46%			767,951			44%