TECHNOLOGY
JANUARY 18, 2010, 11:58 A.M. ET.
Baidu Chief Technology Officer Resigns
By AARON BACK
BEIJING—Baidu Inc. said its chief technology officer resigned, highlighting business difficulties at China's dominant search engine just as rival Google Inc. said it is considering a withdrawal from the market.
Baidu's difficulties don't appear directly related to Google's statement, but rather to the rollout of a new advertising tool with which Baidu has struggled.
Baidu said Monday that Chief Technology Officer Yinan Li resigned for personal reasons. The news came ten days after the resignation of Baidu Chief Operating Officer Peng Ye, also for personal reasons, according to the company.
Baidu didn't offer further details on the resignations Monday and hasn't named successors. However, when the company announced Mr. Ye's resignation on Jan. 8, it said it was promoting Haoyu Shen from vice president of business operations to senior vice president, and Zhan Wang, senior director of business products, to vice president.
Some market watchers speculated that the resignations could be linked to the company's rocky transition to its new Phoenix Nest advertising system.
"There are signs the transition to Phoenix Nest may not be going as well as originally anticipated," said Nomura Securities analyst Jin Yoon.
He said the shakeup likely is unrelated to the turmoil surrounding Google, its main competitor, which said last week it may pull out of China. Such a move likely would be a boon to Baidu. Google's announcement "was a welcome surprise to Baidu," Mr. Yoon said.
Phoenix Nest was started last April, partly in response to criticism that Baidu didn't clearly differentiate advertisements from regular search results. Baidu has said the system also offers tools to advertisers to better measure their return on ad spending, so will lead to higher revenue
But on a conference call with analysts in October, Mr. Shen said customers familiar with the old system might not be ready to switch by Dec. 1, when Baidu had planned to make a full transition to the new system. The switch would reduce revenue growth in the fourth quarter by 10 percentage points from the third quarter, Mr. Shen said at the time.
Mr. Li had been at Baidu since October 2008. He had been chief telecommunications scientist and vice president at telecommunications-equipment maker Huawei Technologies Co., which is based in Shenzhen, China.
Write to Aaron Back at aaron.back@dowjones.com
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