Internet search company Baidu.com Inc yesterday apologized for accepting money from unlicensed medical companies for top search slots.
Baidu confirmed in a statement that some websites did use the page-rank bid service to promote false medical information, which was first spotted by China Central Television over the weekend.
The company said it was already carrying out an investigation into the event and will cooperate with the relevant authorities in the future.
CCTV reported that Baidu had accepted money from illegal medical companies and placed their Web links on top of search results. Baidu's marketing employees were also reported to have the knowledge of these, it said.
Unlike Google and Yahoo!, Baidu allows companies to buy keywords if they want to appear higher in search results.
The controversial service, called page-rank bid, accounts for over 80 percent of the company's revenue.
Baidu's shares fell over 25 percent yesterday after the news came out.
Insiders estimate that over 5 percent of Baidu's revenue comes from pharmaceutical and medical companies.
With over 60 percent of China's search engine market, Baidu is often seen as one of the few Chinese companies that was able to beat its stronger foreign competitors.
But the company's business model, which inserts ads in the natural search result without notice, has long been criticized for destroying the integrity of the search engine.
(China Daily 11/19/2008 page14)