BAIDU, INC. filed this Form 20-F on 03/31/2017
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investment, which would decrease the amount of cash available for working capital or capital expenditures. In addition, if we use our equity securities to pay for investments and acquisitions, we may dilute the value of our ADSs and the underlying ordinary shares. If we borrow funds to finance investments and acquisitions, such debt instruments may contain restrictive covenants that could, among other things, restrict us from distributing dividends. Moreover, acquisitions may also generate significant amortization expenses related to intangible assets. We may also incur impairment charges to earnings for investments and acquired businesses and assets which are determined to be impaired, and recognize the proportional share of the net losses of the investees to the extent of the amount of the investments for the equity method investments.

We are subject to risks and uncertainties faced by companies in a rapidly evolving industry.

We operate in the rapidly evolving internet industry, which makes it difficult to predict our future results of operations. Accordingly, you should consider our future prospects in light of the risks and uncertainties experienced by companies in evolving industries. Some of these risks and uncertainties relate to our ability to:



maintain our leading position in the Chinese language internet search market;



offer attractive, useful and innovative products and services to attract and retain a larger user base;



attract users’ continuing use of internet search services;



retain existing customers and attract additional customers and increase spending per customer;



upgrade our technology to support increased traffic and expanded product and service offerings;



further enhance our brand;



respond to competitive market conditions;



respond to evolving user preferences or industry changes;



respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights;



maintain effective control of our costs and expenses;



execute our strategic investments and acquisitions and post-acquisition integrations effectively;



attract, retain and motivate qualified personnel and maintain good relations with a young and growing work force; and



build profitable operations in new markets and other overseas internet markets we have entered into.

If we are unsuccessful in addressing any of these risks and uncertainties, our business may be materially and adversely affected.

Our historical growth rate may not be indicative of our future growth rate.

We have experienced substantial growth in recent years. Our total revenues grew at a compound annual growth rate of 33.4% from 2012 to 2016. Our growth was driven in part by the growth in China’s internet and online marketing industries, which may not be indicative of future growth or be sustainable. Our past growth rate may not be indicative of our future growth rate.

Our indebtedness could adversely affect our financial condition and our ability to obtain additional capital on reasonable terms when necessary.

As of December 31, 2016, we had an aggregate of US$6.4 billion of outstanding indebtedness that will mature between 2017 and 2025 and we may incur additional indebtedness in the future. Our current and future