<< Back
Baidu Announces Fourth Quarter and Full Year 2006 Results
Feb 14, 2007
               2006 Annual Net Income Grows 534% Year-Over-Year

BEIJING, Feb. 14 /PRNewswire-FirstCall/ -- Baidu.com, 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, 2006.(1)

    Fourth Quarter and Fiscal Year 2006 Highlights

    -- Total revenues in the fourth quarter 2006 increased to RMB271.3 million
       ($34.8 million), representing a 136.1% increase from the corresponding
       period in 2005.

    -- Total revenues in fiscal year 2006 increased to RMB837.8 million
       ($107.4 million), representing a 162.5% increase from 2005.

    -- Net income in the fourth quarter 2006 increased to RMB122.8 million
       ($15.7 million), representing a 400.2% increase from the corresponding
       period in 2005. Basic and diluted earnings per share ("EPS") for the
       fourth quarter 2006 were RMB3.65 ($0.47) and RMB3.54 ($0.45),
       respectively; basic and diluted EPS excluding share-based compensation
       expenses (non-GAAP) for the fourth quarter of 2006 were RMB3.87 ($0.50)
       and RMB3.75 ($0.48), respectively.

    -- Net income in fiscal year 2006 increased to RMB301.8 million
       ($38.7 million), representing a 533.9% increase from 2005. Basic and
       diluted EPS for 2006 were RMB9.06 ($1.16) and RMB8.75 ($1.12),
       respectively; basic and diluted EPS excluding share-based compensation
       expenses and cumulative effect of change in accounting principle (non-
       GAAP) for 2006 were RMB10.38 ($1.33) and RMB10.01 ($1.28),
       respectively.

    -- The number of active online marketing customers during the fourth
       quarter grew to over 108,000, an increase of 5.9% from the previous
       quarter.

"We are pleased to deliver another quarter of robust results as our rapidly growing brand recognition and our focus on providing the best user experience allowed us to strengthen our leading position in Chinese search," said Robin Li, Baidu's Chairman and CEO.

Mr. Li added, "User traffic growth was driven by both our existing core search and community-based products as well as by new products introduced during the quarter."

Mr. Li noted that Baidu Space and Baidu Knows continued to attract a rapidly growing base of loyal users, and new products including Baidu Blog Search and Baidu Favorites have been well received.

"We achieved healthy revenue growth during the fourth quarter as we continued the transition to our dynamic bidding and intelligent ranking systems," said Shawn Wang, Baidu's CFO. "During the quarter, we expanded our direct sales forces in key geographic markets and strengthened our focus on customer service."

Mr. Wang added, "We are also pleased with the progress we have been making on our Japanese language search technology. In the quarters ahead we will continue to make investments in technology, network capacity and physical infrastructure that position us for long-term growth."

Mr. Wang noted that Baidu continues to explore strategic partnerships with media and Internet industry leaders which enhance user experience. During the fourth quarter, the Company formed content partnerships with MTV Networks and EMI as well as a strategic alliance with Microsoft for paid search services.

Fourth Quarter 2006 Results

Baidu reported total revenues of RMB271.3 million ($34.8 million) for the fourth quarter ended December 31, 2006, representing a 136.1% increase from the corresponding period in 2005.

Online marketing revenues for the fourth quarter were RMB269.8 million ($34.6 million), representing a 141.4% increase from the fourth quarter 2005. The growth was driven by the increases in both the number of active online marketing customers and revenue per customer. Baidu had more than 108,000 active online marketing customers in the fourth quarter of 2006, representing a 5.9% increase from the previous quarter. Revenue per online marketing customer for the fourth quarter increased to RMB2,500 ($320.3), a sequential increase of 7.3% and an increase of 41.0% from the corresponding period in 2005.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB23.6 million ($3.0 million), representing 8.7% of total revenues, compared to 7.8% in the corresponding period in 2005.

Selling, general and administrative expenses were RMB71.0 million ($9.1 million), representing an increase of 43.8% from the corresponding period in 2005, primarily due to expansion of the direct sales force.

Research and development expenses were RMB20.9 million ($2.7 million), representing a 46.2% increase from the corresponding period in 2005, primarily due to headcount increases.

Share-based compensation expenses, which were allocated to related operating cost and expense line items, decreased in aggregate to RMB7.4 million ($0.9 million) in the fourth quarter of 2006 from RMB10.5 million in the corresponding period in 2005. The decrease in share-based compensation expenses primarily reflects reduced options grants during the quarter, decelerated amortization of existing options granted before 2006 and change in actual and estimated option forfeiture rate.

Operating profit was RMB101.7 million ($13.0 million), representing a 615.3% increase from the corresponding period in 2005. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB109.1 million ($14.0 million) for the fourth quarter of 2006, a 342.1% increase from the corresponding period in 2005.

Income tax benefit was RMB6.0 million ($0.8 million). During the fourth quarter, one of Baidu's PRC subsidiaries qualified for preferential enterprise income tax treatment for 2006 and the following two years. As a result, the income tax benefit in the fourth quarter included a reversal of RMB7.2 million ($0.9 million) that was provided in previous quarters.

Net income was RMB122.8 million ($15.7 million), representing a 400.2% increase from the corresponding period in 2005. Basic and diluted EPS for the fourth quarter of 2006 amounted to RMB3.65 ($0.47) and RMB3.54 ($0.45), respectively.

Net income excluding share-based compensation expenses (non-GAAP) was RMB130.2 million ($16.7 million), a 271.9% increase from the corresponding period in 2005. Basic and diluted EPS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2006 were RMB3.87 ($0.50) and RMB3.75 ($0.48), respectively.

As of December 31, 2006, the Company had cash, cash equivalents and short- term investments of RMB1.2 billion ($156.5 million). Net operating cash flow and capital expenditures for the fourth quarter of 2006 were RMB170.8 million ($21.9 million) and RMB22.8 million ($2.9 million), respectively.

Adjusted EBITDA (non-GAAP), which is defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non- operating income and share-based compensation expenses, were RMB132.1 million ($16.9 million) for the fourth quarter of 2006, representing a 261.1% increase from the corresponding period in 2005.

Fiscal Year 2006 Results

Total revenues in 2006 were RMB837.8 million ($107.4 million), representing a 162.5% increase from 2005.

Online marketing revenues in 2006 were RMB828.5 million ($106.2 million), representing a 169.5% increase from 2005.

Traffic acquisition costs in 2006 were RMB75.2 million ($9.6 million), representing 9.0% of total revenues compared to 6.6% in 2005. The increase in traffic acquisition costs as a percentage of total revenues primarily reflects an increase in revenue contribution by Baidu Union properties.

Selling, general and administrative expenses in 2006 were RMB250.2 million ($32.1 million), representing an increase of 85.7% from the previous year, mainly due to expansion of the direct sales force and strengthening of the distributor network.

Research and development expenses totaled RMB79.2 million ($10.2 million) in 2006, representing a 79.3% increase from 2005 primarily due to an increase in research and development staff.

Operating profit in 2006 was RMB262.9 million ($33.7 million), a 633.4% increase from 2005. Operating profit excluding share-based compensation expenses (non-GAAP) in 2006 was RMB311.2 million ($39.9 million), representing a 348.3% increase from 2005.

Net income in 2006 was RMB301.8 million ($38.7 million), representing a 533.9% increase from 2005. Basic and diluted EPS for 2006 amounted to RMB9.06 ($1.16) and RMB8.75 ($1.12), respectively.

Net income excluding share-based compensation expenses and cumulative effect of change in accounting principle (non-GAAP) in 2006 was RMB345.4 million ($44.3 million), reflecting a 325.5% increase from 2005. Basic and diluted EPS excluding share-based compensation expenses and cumulative effect of change in accounting principle (non-GAAP) in 2006 were RMB10.38 ($1.33) and RMB10.01 ($1.28), respectively.

Full year net operating cash flow and capital expenditures were RMB526.1 million ($67.4 million) and RMB127.5 million ($16.3 million), respectively.

Adjusted EBITDA (non-GAAP) in 2006 was RMB381.6 million ($48.9 million) in 2006, representing a 269.7% increase from 2005.

Outlook for First Quarter 2007

Baidu currently expects to generate total revenues in an amount ranging from RMB265 million ($34 million) to RMB275 million ($35 million) for the first quarter of 2007, representing a 95% to 103% increase from the corresponding period in 2006. 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 14, 2007 U.S. Eastern Standard Time (9 AM on February 15, 2007 Beijing/Hong Kong time).

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

    US: +1 617 786 2964
    UK: +44 207 365 8426
    Hong Kong: +852 3002 1672
    Passcode for all regions: 18273456

A replay of the conference call may be accessed by phone at the following number until 10 PM on February 21, 2007 U.S. Eastern Standard Time.

International: +1 617 801 6888

Passcode: 36765439

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

About Baidu

Baidu.com, 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 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" and similar statements. Among other things, the outlook for first quarter 2007 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; and Chinese governmental policies relating to the Internet and Internet content providers. 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 14, 2007, 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 computes its non-GAAP financial measures using the same consistent method from quarter to quarter, except that the non-GAAP measures for the quarter ended March 31, 2006 reflected the one-time cumulative effect of change in accounting principle due to our adoption of SFAS 123(R) since January 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.


    (1) This announcement contains translations of certain RMB amounts into
        U.S. dollars at specified rates solely for the convenience of the
        reader. Unless otherwise noted, all translations from RMB to U.S.
        dollars are made at a rate of RMB7.8041 to US$1.00, the effective noon
        buying rate as of December 31, 2006 in The City of New York for cable
        transfers of RMB as certified for customs purposes by the Federal
        Reserve Bank of New York.




    Baidu.com, Inc.
    Condensed Consolidated Balance Sheets

                                       December 31, September 30, December 31,
    (in RMB thousands)                     2006         2006          2005
                                        Unaudited     Unaudited     Audited

    ASSETS
      Current assets:
        Cash, cash equivalents and
         short-term investments         1,221,613     1,083,334       900,593
        Accounts receivable, net           23,051        25,205        22,353
        Prepaid expenses and other
         current assets                    32,339        49,155        10,957
        Deferred tax asset, net             1,734         1,490         1,449
      Total current assets              1,278,737     1,159,184       935,352

       Non-current assets:
         Fixed assets, net                191,734       160,195        96,420
         Prepayment for land use
          rights                           92,400        92,400        77,200
         Intangible assets, net            44,386        46,902        13,303
         Goodwill                          47,316        44,183         9,287
         Investments                          -             -           2,018
         Deferred tax asset, net            5,802         6,085         2,843
         Others                             7,702         3,746           -
       Total non-current assets           389,340       353,511       201,071

     TOTAL ASSETS                       1,668,077     1,512,695     1,136,423

     LIABILITIES AND SHAREHOLDERS'
      EQUITY
       Current liabilities:
         Accrued expenses and other
          liabilities                     153,141       131,213        53,137
         Customers' deposits              141,185       129,530        70,327
         Deferred revenue                   2,583         3,874         7,658
         Deferred income                    4,090         4,090           124
       Total current liabilities          300,999       268,707       131,246

       Non-current liabilities:
         Long-term payable for
          acquisition                       7,000         7,000           -
         Deferred income                    2,817         3,839           124
       Total non-current liabilities        9,817        10,839           124

    Total liabilities                     310,816       279,546       131,370

    Shareholders' equity
      Class A ordinary shares, par value
       US$0.00005 per share, 825,000,000
       shares authorized and 22,574,381
       shares issued and outstanding as
       at December 31, 2006 and 9,460,426
       shares as at December 31, 2005           9             9             4
      Class B Ordinary Shares, par value
       US$0.00005 per share, 35,400,000
       shares authorized and 11,130,018
       shares issued and outstanding as
       at December 31, 2006 and
       23,485,336 shares as at
       December 31, 2005                        5             5            10
      Additional paid-in capital        1,088,176     1,076,004     1,009,488
      Accumulated other
       comprehensive loss                 (33,697)      (22,834)       (5,451)
      Retained earnings                   302,768       179,965         1,002
    Total shareholders' equity          1,357,261     1,233,149     1,005,053

    TOTAL LIABILITIES AND
      SHAREHOLDERS' EQUITY              1,668,077     1,512,695     1,136,423



    Baidu.com, Inc.
    Condensed Consolidated Statements of Income

                                             For the Three Months Ended
    (in RMB thousands except for     December 31,  December 31,  September 30,
     share, per share information)       2006          2005           2006
                                      Unaudited       Unaudited     Unaudited
    Revenues:
      Online marketing services         269,754         111,739       237,625
      Others                              1,552           3,161         1,706
    Total revenues                      271,306         114,900       239,331

    Operating costs and expenses:
      Cost of revenues (note 1, 2)      (77,669)        (37,022)      (68,399)
      Selling, general and
       administrative (note 2)          (70,999)        (49,359)      (70,184)
      Research and
       development (note 2)             (20,899)        (14,296)      (24,520)
    Total operating costs and
     expenses                          (169,567)       (100,677)     (163,103)

    Operating profit                    101,739          14,223        76,228

    Other income
      Interest income, net               12,016           8,162        11,337
      Foreign exchange loss, net            -              (109)          -
      Other, net                          3,048             125          (286)
    Total other income                   15,064           8,178        11,051

    Income before income taxes and
     cumulative effect of change in
     accounting principle               116,803          22,401        87,279

    Income taxes                          6,000           2,148        (2,026)

    Cumulative effect of change in
     accounting principle

    Net income                          122,803          24,549        85,253


    Earnings per share for Class A
     and Class B ordinary shares:
      Basic                                3.65            0.75          2.54
      Diluted                              3.54            0.71          2.46
    Weighted average aggregate number
     of Class A and Class B ordinary
     shares outstanding:
      Basic                          33,666,239      32,945,046    33,500,948
      Diluted                        34,711,753      34,584,637    34,628,611


    Pro forma earnings per share for
     Class A and Class B ordinary
     shares(2):
      Basic                                3.65            0.75          2.54
      Diluted                              3.54            0.71          2.46
    Pro forma weighted average
     aggregate number of Class A
     and Class B ordinary shares
     outstanding on an as
     converted basis for Class A
     and Class B ordinary shares:
      Basic                          33,666,239      32,945,046    33,500,948
      Diluted                        34,711,753      34,584,637    34,628,611

    (Note 1) Cost of revenues are
        detailed as follows:
         Business tax and surcharges    (16,357)         (7,470)      (14,891)
         Traffic acquisition costs      (23,631)         (8,943)      (21,640)
         Bandwidth costs                (12,656)         (6,728)      (10,503)
         Depreciation and
          amortization costs            (16,898)         (9,117)      (14,053)
         Operational costs               (7,931)         (4,594)       (6,723)
         Share-based
          compensation expenses            (196)           (170)         (589)
         Total cost of revenues         (77,669)        (37,022)      (68,399)

    (Note 2) Includes share-based
        compensation expenses are
        allocated as follows:
         Cost of revenues                  (196)           (170)         (589)
         Selling, general and
          administrative                 (6,166)         (6,981)      (10,014)
         Research and development          (992)         (3,302)       (5,779)
         Total share-based
          compensation expenses          (7,354)        (10,453)      (16,382)


                                                        Twelve Months Ended
                                                     December 31, December 31,
                                                        2006         2005
                                                      Unaudited     Audited
    Revenues:
      Online marketing services                         828,484       307,363
      Others                                              9,354        11,852
    Total revenues                                      837,838       319,215

    Operating costs and expenses:
      Cost of revenues (note 1, 2)                     (245,489)     (104,401)
      Selling, general and
       administrative (note 2)                         (250,240)     (134,771)
      Research and
       development (note 2)                             (79,231)      (44,200)
    Total operating costs and
     expenses                                          (574,960)     (283,372)

    Operating profit                                    262,878        35,843

    Other income
      Interest income, net                               42,443        13,580
      Foreign exchange loss, net                            (89)         (659)
      Other, net                                          4,187           752
    Total other income                                   46,541        13,673

    Income before income taxes and
     cumulative effect of change in
     accounting principle                               309,419        49,516

    Income taxes                                        (12,256)       (1,911)

    Cumulative effect of change in
     accounting principle                                 4,603

    Net income                                          301,766        47,605

    Earnings per share for Class A
     and Class B ordinary shares:
      Basic                                                9.06          2.40
      Diluted                                              8.75          1.49
    Weighted average aggregate
     number of Class A and Class B
     ordinary shares outstanding:
      Basic                                          33,290,696    19,808,058
      Diluted                                        34,506,594    32,043,888

    Pro forma earnings per share
     for Class A and Class B
     ordinary shares(2):
      Basic                                                9.06          1.58
      Diluted                                              8.75          1.49
    Pro forma weighted average
     aggregate number of Class A
     and Class B ordinary shares
     outstanding on an as converted
     basis for Class A and Class B
     ordinary shares:
      Basic                                          33,290,696    30,213,606
      Diluted                                        34,506,594    32,043,888

    (Note 1) Cost of revenues are
        detailed as follows:
         Business tax and surcharges                    (51,833)      (20,770)
         Traffic acquisition costs                      (75,180)      (21,212)
         Bandwidth costs                                (40,005)      (21,274)
         Depreciation and
          amortization costs                            (53,491)      (25,259)
         Operational costs                              (23,564)      (14,912)
         Share-based compensation
          expenses                                       (1,416)         (974)
         Total cost of revenues                        (245,489)     (104,401)

     (Note 2) Includes share-based
         compensation expenses are
         allocated as follows:
          Cost of revenues                               (1,416)         (974)
          Selling, general and
           administrative                               (32,970)      (22,804)
          Research and
           development                                  (13,894)       (9,793)
          Total share-based
           compensation expenses                        (48,280)      (33,571)

    (2) Pro forma basic and diluted earnings per share are computed by
        dividing net income by weighted average number of ordinary shares
        outstanding for the period plus the number of ordinary shares
        resulting from the assumed conversion of all the outstanding
        redeemable convertible preferred share upon closing of the initial
        public offering as if the conversion had occurred at the beginning of
        the period, or when the preferred shares were issued, if later.


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

                         Three months ended December 31, 2005
                      GAAP Result   Adjustment   Non-GAAP Results
    Operating profit    14,223         10,453         24,676

                         Three months ended December 31, 2005
                      GAAP Result   Adjustment   Non-GAAP Results
    Net income          24,549         10,453         35,002


                         Three months ended September 30, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Operating profit    76,228         16,382         92,610

                         Three months ended September 30, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Net income          85,253         16,382        101,635


                         Three months ended December 31, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Operating profit   101,739          7,354        109,093

                         Three months ended December 31, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Net income         122,803          7,354        130,157


                         Twelve months ended December 31, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Operating profit   262,878         48,280        311,158

                         Twelve months ended December 31, 2006
                      GAAP Result   Adjustment   Non-GAAP Results
    Net income         301,766         43,677        345,443


                         Twelve months ended December 31, 2005
                      GAAP Result   Adjustment   Non-GAAP Results
    Operating profit    35,843         33,571         69,414

                         Twelve months ended December 31, 2005
                      GAAP Result   Adjustment   Non-GAAP Results
    Net income          47,605         33,571         81,176


    (*) The adjustment is for share-based compensation expenses and cumulative
        effect of change in accounting principle.


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

                          Three               Three               Three
                     months    As a %    months    As a %    months    As a %
                     ended      of       ended      of       ended      of
                    December   total    September  total    December   total
                    31, 2005  revenues  30, 2006  revenues  31, 2006  revenues

    Net cash
     provided by
     operating
     activities      62,045     54%     131,068     55%     170,835     63%

    Changes in
     assets and
     liabilities,
     net of
     effects of
     acquisitions   (15,155)   -13%      (9,695)    -4%     (17,721)    -7%

    Income taxes     (2,148)    -2%       2,026      1%      (6,000)    -2%

    Interest income
     and other, net  (8,178)    -7%     (11,051)    -5%     (15,064)    -6%

    Adjusted EBITDA  36,564     32%     112,348     47%     132,050     48%



                                        Twelve              Twelve
                                        months     As a %   months     As a %
                                        ended       of      ended       of
                                        December   total    December   total
                                        31, 2006  revenues  31, 2005  revenues
    Net cash
     provided by
     operating
     activities                         526,144     63%     162,352     51%

    Changes in
     assets and
     liabilities,
     net of
     effects of
     acquisitions                      (110,264)   -13%     (47,374)   -15%

    Income taxes                         12,256      1%       1,911      1%

    Interest income
     and other, net                     (46,541)    -6%     (13,673)    -4%

    Adjusted EBITDA                     381,595     45%     103,216     33%

     (*) Definition of adjusted EBITDA: earnings before interest, income
         taxes, depreciation, amortization, other non-operating net income,
         share-based compensation expenses and cumulative effect of change in
         accounting principle.
SOURCE  Baidu.com, Inc.
    -0-                             02/14/2007
    /CONTACT:  For investor inquiries, Linda Sun, Baidu.com, Inc.,
+8610-8262-1188 *8246, ir@baidu.com; For investor and media inquiries, China -
Rory Macpherson, Ogilvy Public Relations Worldwide (Beijing), +8610-8520-6553,
rory.macpherson@ogilvy.com, or US - Thomas Smith, Ogilvy Public Relations
Worldwide (New York), +1-212-880-5269, thomas.smith@ogilvypr.com /
    /Web site:  http://ir.baidu.com /
    (BIDU)

CO:  Baidu.com, Inc.
ST:  China
IN:  MLM ITE CPR
SU:  ERN CCA ERP

KJ-MS
-- NYW114 --
7722 02/14/2007 16:30 EST http://www.prnewswire.com