Baidu Inc. operates the number one search engine in China^[1] and is the most visited Chinese web site.^[2] Although the company has some international operations, it earned the majority of FY 2010 revenue in China.^[3] The company's core business is selling advertising online, and it offers various services to users (content search, news, community-based information sharing, etc.) to create an audience for its paying customers' ads. Web search is the core of the company's online offering; its ability to deliver the most useful and relevant search results drives its ability to sell advertising (online marketing service comprised 100.0% of FY 2010 revenue).^[4]

Baidu's market opportunity has grown with the number of internet users in China, but arguably this also makes the market more competitive, attracting both domestic and international competition. The Chinese government heavily regulates online content and advertisers, something which has helped shape the competitive landscape; major competitor Google was forced to exit in 2010 following disagreements on censorship and content control.^[5] Baidu's market share in China search grew to 75.5% after Google pulled out.^[6]

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