##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 20-F/A
 (Amendment No. 1)
    (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    12(g) OF THE SECURITIES EXCHANGE ACT OF 1934orþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2010.oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          tooro

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this
    shell company report   Commission file number:
    000-51469
  Baidu, Inc.
  (Exact name of Registrant as
    specified in its charter)
 N/A
  (Translation of
    Registrants name into English)
  Cayman Islands
 (Jurisdiction of incorporation
    or organization)
  Baidu Campus
 No. 10 Shangdi 10th
    Street
 Haidian District, Beijing
    100085
 The Peoples Republic of
    China
  (Address of principal executive
    offices)
  Jennifer Li, Chief Financial
    Officer
 Telephone: +(86
    10) 5992-8888
 Email:
    jenniferli@baidu.com
 Facsimile: +(86
    10) 5992-0000
 Baidu Campus
 No. 10 Shangdi 10th
    Street,
 Haidian District, Beijing
    100085
 The Peoples Republic of
    China
 (Name, Telephone, Email and/or
    Facsimile number and Address of Company Contact
    Person)
  Securities registered or to be
    registered pursuant to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredClass A ordinary shares, par value US$0.00005
    per share

The NASDAQ Stock Market LLC*
    (The NASDAQ Global Select Market)   Securities registered or to be
    registered pursuant to Section 12(g) of the Act:
 None
  (Title of Class)
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act:
 None
  (Title of Class)
    27,045,340 Class A ordinary shares and 7,804,332
    Class B ordinary shares, par value US$0.00005 per share, as
    of December 31, 2010.
  þ o
  o þ
  þ o
  Regulation S-T þ o
  Rule 12b-2
  Large
    accelerated
    filer  þ
    Accelerated
    filer  o
    Non-accelerated
    filer  o    þ
  o o
    o
  o
  Rule 12b-2 o þ
    o o
  *
    
    Not for trading, but only in
    connection with the listing on The NASDAQ Global Select Market
    of American depositary shares (ADSs). Currently, 10
    ADSs represent one Class A ordinary share.




---



##### 





TABLE OF
    CONTENTS
   
 EXPLANTARY NOTE


2Item 15.


Controls and Procedures


3Item 18.


Financial Statements


6Item 19.


Exhibits


6SIGNATURES


11EX-12.1EX-12.2   1




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##### Table of Contents



EXPLANTARY
    NOTE  Form 20-F/A Form 20-F Form 20-F), Form 20-F. Form 20-F. Rule 12b-15
  Form 20-F Form 20-F
 2




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##### Table of Contents



Item 15.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e) Rule 13a-15(b)
    Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f) Rule 13a-15(c)
    page F-2 Form 20-F.
  Changes
    in Internal Control over Financial Reporting
  Form 20-F
 3




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board of Directors and Shareholders
 Baidu, Inc.
          
    4




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board of Directors and Shareholders
 Baidu, Inc.
              
    5




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##### Table of Contents



Item 18.
    Financial
    Statements  page F-1 Form 20-F,
  Item 19.
    Exhibits  ExhibitNumber

Description of Document1.1

Third Amended and Restated Memorandum and Articles of
    Association of the Registrant (incorporated by reference to
    Exhibit 99.2 of
    Form 6-K
    furnished with the Securities and Exchange Commission on
    December 17, 2008)2.1

Registrants Specimen American Depositary Receipt
    (incorporated by reference to Exhibit 1 of the prospectus
    filed with the Securities and Exchange Commission on
    January 5, 2009 pursuant to Rule 424(b)(3) under the
    Securities Act)2.2

Registrants Specimen Certificate for Class A Ordinary
    Shares (incorporated by reference to Exhibit 4.2 of
    Amendment No. 5 to our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    August 2, 2005)2.3

Form of Deposit Agreement among the Registrant, the depositary
    and holder of the American Depositary Receipts (incorporated by
    reference to Exhibit 4.3 to our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.1

Second Amended and Restated Shareholders Agreement, dated as of
    June 9, 2004, among the Registrant and other parties
    therein (incorporated by reference to Exhibit 4.4 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.2

2000 Option Plan (amended and restated effective
    December 16, 2008) (incorporated by reference to
    Exhibit 99.3 of
    Form 6-K
    furnished with the Securities and Exchange Commission on
    December 17, 2008)4.3

2008 Share Incentive Plan (incorporated by reference to
    Exhibit 99.4 of
    Form 6-K
    furnished with the Securities and Exchange Commission on
    December 17, 2008)4.4

Form of Indemnification Agreement with the Registrants
    directors (incorporated by reference to Exhibit 10.3 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.5

Form of Employment Agreement between the Registrant and an
    Executive Officer of the Registrant (incorporated by reference
    to Exhibit 10.4 of our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.6

Translation of Technology Consulting and Services Agreement
    dated as of March 22, 2005 between Baidu Online and Baidu
    Netcom (incorporated by reference to Exhibit 99.2 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.7

Translation of Business Cooperation Agreement dated as of
    March 22, 2005 between Baidu Online and Baidu Netcom
    (incorporated by reference to Exhibit 99.3 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.8

Translation of Operating Agreement dated as of March 22,
    2005 between Baidu Online and Baidu Netcom (incorporated by
    reference to Exhibit 99.4 of our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005) 6




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##### Table of Contents



ExhibitNumber

Description of Document4.9

Translation of Software License Agreement dated as of
    March 22, 2005 between Baidu Online and Baidu Netcom
    (incorporated by reference to Exhibit 99.5 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.10

Translation of Trademark License Agreement dated as of
    March 1, 2004 between Baidu Online and Baidu Netcom and the
    supplementary agreement dated as of January 18, 2005
    (incorporated by reference to Exhibit 99.6 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.11

Translation of Domain Name License Agreement dated as of
    March 1, 2004 between Baidu Online and Baidu Netcom and the
    supplementary agreement dated August 9, 2004 (incorporated
    by reference to Exhibit 99.7 of our Registration Statement
    on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.12

Translation of Web Layout Copyright License Agreement dated as
    of March 1, 2004 between Baidu Online and Baidu Netcom and
    the supplementary agreement dated as of August 9, 2004
    (incorporated by reference to Exhibit 99.8 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.13

Translation of Proxy Agreement dated as of August 9, 2004
    among Baidu Online, Baidu Netcom, Robin Yanhong Li and Eric Yong
    Xu (incorporated by reference to Exhibit 99.9 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.14

Translation of Equity Pledge Agreement dated as of
    March 22, 2005 among Baidu Online, Robin Yanhong Li and
    Eric Yong Xu (incorporated by reference to Exhibit 99.10 of
    our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.15

Translation of Exclusive Equity Purchase Option Agreement dated
    as of March 22, 2005 among Baidu Online, Robin Yanhong Li
    and Eric Yong Xu (incorporated by reference to
    Exhibit 99.11 of our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.16

Translation of Loan Agreement dated as of March 22, 2005
    among Baidu Online, Robin Yanhong Li and Eric Yong Xu
    (incorporated by reference to Exhibit 99.12 of our
    Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.17

Translation of Form of Irrevocable Powers of Attorney issued by
    the shareholders of Baidu Netcom (incorporated by reference to
    Exhibit 99.13 of our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)4.18

Translation of the form of Technology Consulting and Services
    Agreement between Baidu Online and a consolidated affiliated PRC
    entity (incorporated by reference to Exhibit 4.19 of our
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.19

Translation of the form of Operating Agreement between Baidu
    Online and a consolidated affiliated PRC entity (incorporated by
    reference to Exhibit 4.20 of our Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.20

Translation of the form of Web Layout Copyright License
    Agreement between Baidu Online and a consolidated affiliated PRC
    entity (incorporated by reference to Exhibit 4.21 of our
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008) 7




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##### Table of Contents



ExhibitNumber

Description of Document4.21

Translation of the form of Proxy Agreement among Baidu Online, a
    consolidated affiliated PRC entity and the shareholders of the
    consolidated affiliated PRC entity (incorporated by reference to
    Exhibit 4.22 of our Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.22

Translation of the form of Equity Pledge Agreement between Baidu
    Online and the shareholder of a consolidated affiliated PRC
    entity (incorporated by reference to Exhibit 4.23 of our
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.23

Translation of the form of Exclusive Equity Purchase Option
    Agreement between Baidu Online and the shareholder of a
    consolidated affiliated PRC entity (incorporated by reference to
    Exhibit 4.24 of our Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.24

Translation of the form of Loan Agreement between Baidu Online
    and the shareholder of a consolidated affiliated PRC entity
    (incorporated by reference to Exhibit 4.25 of our Annual
    Report on
    Form 20-F
    filed with the Securities and Exchange Commission on
    June 5, 2008)4.25*

Translation of the Technology Consulting and Services Agreement
    dated as of June 23, 2006 between Baidu Online and Beijing
    Perusal4.26*

Translation of the Operating Agreement dated as of June 23,
    2006 between Baidu Online, Beijing Perusal, Jiping Liu and Yazhu
    Zhang and the supplementary agreement dated as of April 22,
    20104.27*

Translation of the Webpage Layout Copyright License Agreement
    dated as of June 23, 2006 between Baidu Online and Beijing
    Perusal4.28*

Translation of the Proxy Agreement dated as of June 23,
    2006 among Jiping Liu, Yazhu Zhang and Baidu Online4.29*

Translation of the Equity Pledge Agreements between Baidu Online
    and Jiping Liu, and between Baidu Online and Yazhu Zhang, both
    dated as of June 19, 20064.30*

Translation of the Exclusive Equity Purchase Option Agreements
    between Baidu Online, Jiping Liu and Beijing Perusal, and
    between Baidu Online, Yazhu Zhang and Beijing Perusal, both
    dated as of May 19, 2006, and supplemental agreements dated
    as of April 22, 20104.31*

Translation of Form of Irrevocable Powers of Attorney issued by
    Jiping Liu and Yazhu Zhang, the shareholders of Baidu Perusal,
    both dated June 23, 20064.32*

Translation of the Loan Agreements between Baidu Online and
    Jiping Liu and between Baidu Online and Yazhu Zhang, both dated
    as of May 19, 20064.33*

Translation of the Technology Consulting and Services Agreement
    dated as of February 28, 2008 between Baidu Online and
    BaiduPay and the supplementary agreement dated as of
    April 22, 20104.34*

Translation of the Operating Agreement dated as of
    February 28, 2008 between Baidu Online, BaiduPay, Jun Yu
    and Beijing Netcom and the supplementary agreement dated as of
    April 22, 20104.35*

Translation of the Webpage Layout Copyright License Agreement
    dated as of February 28, 2008 between Baidu Online and
    BaiduPay4.36*

Translation of the Proxy Agreement between Hu Cai and Baidu
    Online, dated as of March 5, 20104.37*

Translation of the Equity Pledge Agreement between Baidu Online
    and Hu Cai, dated March 5, 20104.38*

Translation of the Exclusive Equity Purchase Option Agreement
    between Baidu Online, Hu Cai and BaiduPay dated as of
    March 5, 20104.39*

Translation of Form of Irrevocable Powers of Attorney issued by
    Hu Cai, the individual shareholder of BaiduPay, dated as of
    March 5, 2010 8




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##### Table of Contents



ExhibitNumber

Description of Document4.40*

Translation of the Loan Agreement between Baidu Online and Hu
    Cai, dated March 5, 20104.41*

Translation of the Technology Consulting and Services Agreement
    dated as of December 28, 2010 between Baidu HR and Baidu
    Online4.42*

Translation of the Operating Agreement dated as of
    December 28, 2010 between Baidu HR, Baidu Online and
    Yanhong Li4.43*

Translation of the Proxy Agreement between Yanhong Li and Baidu
    Online, dated December 28, 20104.44*

Translation of the Equity Pledge Agreement between Yanhong Li
    and Baidu Online, dated December 28, 20104.45*

Translation of the Exclusive Equity Purchase Option Agreement
    between Baidu HR, Baidu Online and Yanhong Li, dated
    December 28, 20104.46*

Translation of the Loan Agreement between Baidu Online and
    Yanhong Li, dated December 28, 20104.47*

Translation of the Trademark Transfer Agreement between Baidu
    Online and Baidu Netcom, dated March 1, 20104.48*

Translation of the supplementary agreements, dated as of
    March 11, 2010 and April 22, 2010 to the Software
    License Agreement dated as of March 22, 2005 between Baidu
    Online and Baidu Netcom4.49*

Translation of the supplementary agreements, dated March 1,
    2010 and April 22, 2010 to the Trademark License Agreement
    dated as of March 1, 2004 between Baidu Online and Baidu
    Netcom and the supplementary agreement dated as of
    January 18, 20054.50*

Translation of the supplementary agreement dated as of
    March 1, 2010 to the Web Layout Copyright License Agreement
    dated as of March 1, 2004 between Baidu Online and Baidu
    Netcom and the supplementary agreement dated as of
    August 9, 20044.51*

Translation of the supplementary agreement dated April 22,
    2010 to the Operating Agreement dated as of March 22, 2005
    between Baidu Online and Baidu Netcom4.52*

Translation of the supplementary agreement dated March 1,
    2010 to the Domain Name License Agreement dated as of
    March 1, 2004 between Baidu Online and Baidu Netcom and the
    supplementary agreement dated August 9, 20044.53*

Translations of the supplementary agreement dated April 22,
    2010 to the Exclusive Equity Purchase Option Agreement dated as
    of March 22, 2005 among Baidu Online, Robin Yanhong Li and
    Eric Yong Xu4.54*

Translation of the Baidu
    Pay-for-Performance
    Distributors Management Agreement between Baidu Online and Baidu
    Netcom, dated as of December 22, 20108.1*

List of Subsidiaries and Consolidated Affiliated Entities11.1

Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 99.14 of our Registration Statement on
    Form F-1
    (file
    no. 333-126534)
    filed with the Securities and Exchange Commission on
    July 12, 2005)12.1**

Certification by Principal Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200212.2**

Certification by Principal Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200213.1*

Certification by Principal Executive Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200213.2*

Certification by Principal Financial Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 9




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ExhibitNumber

Description of Document15.1*

Consent of Maples and Calder15.2*

Consent of Han Kun Law Offices15.3*

Consent of Ernst & Young Hua Ming101.INS*

XBRL Instance Document101.SCH*

XBRL Taxonomy Extension Schema Document101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document101.LAB*

XBRL Taxonomy Extension Label Linkbase Document101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document     *
    
    Previously filed with the Annual Report on
    Form 20-F
    on March 29, 2011.**
    
    Filed with this Amendment No. 1 to Annual Report on
    Form 20-F. 10




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##### Table of Contents



SIGNATURES  Form 20-F
    By:
    /s/  Robin
    Yanhong Li   Title:
    Chairman and Chief Executive Officer   11




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##### 



BAIDU,
    INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  
  Page(s)Reports of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2009 and 2010


F-4Consolidated Statements of Income for the Years
    Ended December 31, 2008, 2009 and 2010


F-5Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2009 and 2010


F-6Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2008, 2009 and
    2010


F-7Notes to the Consolidated Financial Statements


F-8   F-1




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                   F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                       F-3




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##### Table of Contents



BAIDU,
    INC.CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi
    (RMB), and in thousands of U.S. Dollars
    (US$), except
    for number of shares and per share data)
  December 31,Notes


2009


2010


2010RMB


RMB


US$ASSETSCurrent assets:Cash and cash equivalents


2



4,180,376



7,781,976



1,179,087Restricted cash


2



19,513



38,278



5,800Short-term investments


3



381,149



376,492



57,044Accounts receivable, net of allowance of RMB9,015 for 2009 and
    RMB2,223 (US$337) for 2010


4



161,610



296,900



44,985Other assets, current


5



91,067



103,654



15,706Due from related parties


16







98,660



14,948Deferred tax assets, net


9



9,157



86,487



13,104Total current assets






4,842,872



8,782,447



1,330,674Non-current assets:Fixed assets, net


6



997,557



1,622,412



245,820Intangible assets, net


7



122,595



115,798



17,545Goodwill


7



63,691



63,686



9,649Long-term investments, net


3



14,308



287,968



43,632Deferred tax assets, net


9



33,799



30,843



4,673Other assets, non-current






82,153



145,285



22,013Total non-current assets






1,314,103



2,265,992



343,332TOTAL ASSETS






6,156,975



11,048,439



1,674,006LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities


8



749,861



1,317,771



199,662Customer advances and deposits






607,828



1,029,344



155,961Deferred revenue






42,035



109,032



16,520Due to related parties


16







95,700



14,500Total current liabilities






1,399,724



2,551,847



386,643Non-current liabilities:Long-term payable for business acquisition






4,150







Deferred income










5,000



758Loans payable, noncurrent


10







86,000



13,030Total non-current liabilities






4,150



91,000



13,788Total liabilities






1,403,874



2,642,847



400,431Commitments and contingencies


12Shareholders equityClass A Ordinary Shares, par value US$0.00005 per share,
    825,000,000 shares authorized, and 26,298,960 shares
    and 27,045,340 shares issued and outstanding as at
    December 31, 2009 and 2010


13



11



12



2Class B Ordinary Shares, par value US$0.00005 per share,
    35,400,000 shares authorized, and 8,454,332 shares and
    7,804,332 shares issued and outstanding as at
    December 31, 2009 and 2010


13



4



3



Additional paid-in capital






1,426,070



1,557,258



235,948Accumulated other comprehensive loss


13



(113,513
)


(117,378
)


(17,784
)Retained earnings


13



3,440,529



6,965,697



1,055,409Total shareholders equity






4,753,101



8,405,592



1,273,575TOTAL LIABILITIES AND SHAREHOLDERS EQUITY






6,156,975



11,048,439



1,674,006    F-4




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##### Table of Contents



BAIDU,
    INC.CONSOLIDATED STATEMENTS OF
    INCOME(Amounts in thousands of Renminbi
    (RMB), and in thousands of U.S. Dollars
    (US$), except for
    number of shares and per share (or ADS) data)
  For the Years Ended December 31,Notes


2008


2009


2010


2010RMB


RMB


RMB


US$Revenues:Online marketing services






3,194,461



4,445,310



7,912,869



1,198,920Other services






3,791



2,466



2,205



334Total revenues






3,198,252



4,447,776



7,915,074



1,199,254Operating costs and expenses:Cost of revenues






(1,155,457
)


(1,616,236
)


(2,149,288
)


(325,650
)Selling, general and administrative






(659,804
)


(803,988
)


(1,088,980
)


(164,997
)Research and development






(286,256
)


(422,615
)


(718,038
)


(108,794
)Total operating costs and expenses






(2,101,517
)


(2,842,839
)


(3,956,306
)


(599,441
)Operating profit






1,096,735



1,604,937



3,958,768



599,813Other income:Interest income






47,677



32,661



67,121



10,170Foreign exchange (loss) gain, net






(1,920
)


(42
)


6



1Loss from equity method investments










(229
)


(8,965
)


(1,359
)Other income, net






21,687



45,794



44,233



6,702Total other income






67,444



78,184



102,395



15,514Income before income taxes






1,164,179



1,683,121



4,061,163



615,327Income taxes


9



(116,071
)


(198,017
)


(535,995
)


(81,211
)Net income






1,048,108



1,485,104



3,525,168



534,116Earnings per share for Class A and Class B ordinary
    shares:


14Basic






30.63



42.96



101.28



15.35Diluted






30.19



42.70



100.96



15.30Earnings per ADS (1 Class A ordinary share equals 10 ADSs):


14Basic






3.06



4.30



10.13



1.53Diluted






3.02



4.27



10.10



1.53Weighted average number of Class A and Class B
    ordinary shares outstandingBasic






34,217,443



34,570,790



34,805,362



34,805,362Diluted






34,717,489



34,776,366



34,917,835



34,917,835    F-5




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##### Table of Contents



BAIDU,
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Amounts
    in thousands of Renminbi (RMB), and in thousands of
    U.S. Dollars)
  For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$Cash flows from operating activities:Net income


1,048,108



1,485,104



3,525,168



534,116Adjustments to reconcile net income to net cash generated from
    operating activities:Depreciation of fixed assets and others


268,593



306,281



431,099



65,318Fixed assets written off


1,675



2,606



7,679



1,163Amortization of intangible assets


12,121



10,729



10,252



1,553Deferred tax assets, net


(13,814
)


(10,839
)


(74,374
)


(11,269
)Share-based compensation


83,977



86,318



93,736



14,202Provision (reversal) for doubtful accounts


4,980



493



(6,940
)


(1,052
)Foreign exchange loss


1,157











Gain on investments


(5,739
)


(8,181
)


(41,193
)


(6,241
)Impairment on long-term investments


7,986











Loss from equity method investments






229



8,965



1,359Changes in operating assets and liabilities net of effects of
    acquisition:Restricted cash


(4,562
)


(14,951
)


(18,765
)


(2,843
)Accounts receivable


(33,282
)


(69,331
)


(128,307
)


(19,440
)Other assets


(27,349
)


5,752



(28,560
)


(4,327
)Due from related parties


(10,697
)


10,697



(98,660
)


(14,949
)Customer advances and deposits


164,949



185,302



421,516



63,866Accounts payable and accrued liabilities


130,230



236,012



431,168



65,329Deferred revenue


(13,876
)


38,595



66,997



10,151Deferred income


(2,485
)


(332
)


5,000



758Due to related parties










95,700



14,500Trading securities


129,665











Net cash generated from operating activities


1,741,637



2,264,484



4,700,481



712,194Cash flows from investing activities:Acquisition of fixed assets


(417,898
)


(399,312
)


(895,309
)


(135,653
)Acquisition of business






(12,000
)






Acquisition of intangible assets










(2,452
)


(372
)Capitalization of software costs


(17,668
)


(11,392
)


(10,179
)


(1,542
)Purchases of long-term investments






(2,250
)


(282,932
)


(42,868
)Purchases of short-term investments


(764,720
)


(779,676
)


(2,620,265
)


(397,010
)Sales and maturities of short-term investments


580,430



707,929



2,661,794



403,302Acquisition of long-term prepaid computer parts


(41,246
)


(39,368
)


(68,179
)


(10,330
)Net cash used in investing activities


(661,102
)


(536,069
)


(1,217,522
)


(184,473
)Cash flows from financing activities:Proceeds from loans payable










86,000



13,030Proceeds from exercise of share options


32,902



40,442



38,751



5,872Structured share repurchase, net


(68,539
)


79,070







Repurchase of ordinary shares






(24,419
)






Net cash (used in) generated from financing activities


(35,637
)


95,093



124,751



18,902Effect of exchange rate changes on cash and cash equivalents


(37,889
)


(741
)


(6,110
)


(926
)Net increase in cash and cash equivalents


1,007,009



1,822,767



3,601,600



545,697Cash and cash equivalents at beginning of the year


1,350,600



2,357,609



4,180,376



633,390Cash and cash equivalents at end of the year


2,357,609



4,180,376



7,781,976



1,179,087Supplemental disclosures:Income taxes paid, net


145,830



150,170



436,632



66,156Fixed asset acquisitions included in accounts payable and
    accrued liabilities


52,650



139,038



248,540



37,658Other non-current assets acquisitions included in accounts
    payable and accrued liabilities


4,764



5,176



29,130



4,414Non-cash acquisitions of investments


5,486







3,982



603    F-6




---



##### Table of Contents



BAIDU,
    INC.CONSOLIDATED STATEMENTS OF
    SHAREHOLDERS EQUITY(Amounts in thousands of Renminbi
    (RMB), and in thousands of U.S. Dollars
    (US$),
    except for number of shares)
  AccumulatedOrdinary Shares


Additional


Other





TotalNumber of





Paid-in


Comprehensive


Retained


ShareholdersShares


Amount


Capital


Loss


Earnings


EquityRMB


RMB


RMB


RMB


RMBBalances at December 31, 2007


34,132,989



14



1,171,575



(81,953
)


931,736



2,021,372Comprehensive income:Foreign currency translation adjustment














(27,599
)






(27,599
)Net income


















1,048,108



1,048,108Total comprehensive income






















1,020,509Exercise of share-based awards


382,844



1



28,637











28,638Share-based compensation










86,683











86,683Structured share repurchase










(68,539
)










(68,539
)Balances at December 31, 2008


34,515,833



15



1,218,356



(109,552
)


1,979,844



3,088,663Comprehensive income:Foreign currency translation adjustment














(3,961
)






(3,961
)Net income


















1,485,104



1,485,104Total comprehensive income






















1,481,143Exercise of share-based awards


270,199







41,121











41,121Share-based compensation










87,523











87,523Structured share repurchase










79,070











79,070Repurchase of ordinary shares


(32,740
)














(24,419
)


(24,419
)Balances at December 31, 2009


34,753,292



15



1,426,070



(113,513
)


3,440,529



4,753,101Comprehensive income:Foreign currency translation adjustment










254



(3,865
)






(3,611
)Net income


















3,525,168



3,525,168Total comprehensive income






















3,521,557Exercise of share-based awards


96,380







36,819











36,819Share-based compensation










94,115











94,115Balances at December 31, 2010


34,849,672



15



1,557,258



(117,378
)


6,965,697



8,405,592Balances at December 31, 2010, in US$






2



235,948



(17,784
)


1,055,409



1,273,575    F-7




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
    THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
  1.
    ORGANIZATION,
    CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS      
    Baidu Online Network Technology (Beijing) Co., Ltd. (Baidu
    Online) incorporated under the laws of the Peoples
    Republic of China (PRC) on January 18, 2000,
    Baidu Japan Inc. (Baidu Japan) incorporated under
    the laws of Japan on December 13, 2006,
    Baidu (Hong Kong) Limited (Baidu HK) incorporated
    under the laws of Hong Kong on November 27, 2007, and
    Baidu International Technology (Shenzhen) Co., Ltd. (Baidu
    International) incorporated under the laws of the PRC on
    November 23, 2010.    
    Baidu (China) Co., Ltd. (Baidu China) incorporated
    under the laws of the PRC on June 6, 2005,
    Baidu.com Times Technology (Beijing) Co., Ltd. (Baidu
    Times) incorporated under the laws of the PRC on
    April 19, 2006, and
    Baidu Interaction (Shenzhen) Network Technology Co., Ltd.
    (Baidu Interaction), which obtained its business
    license in March 2009, was incorporated under the laws of the
    PRC. Baidu Interaction is in the process of being dissolved, but
    is not presented as a discontinued operation since the entity
    has not started operating since its inception.    
    Hyakudo Inc. (Hyakudo) incorporated under the laws
    of Japan on April 14, 2008,
    Baido, Inc. (Baido) incorporated under the laws of
    Japan on April 14, 2008, and
    Baidu USA LLC incorporated under the laws of the USA on
    November 12, 2010.    
    Beijing Baidu Netcom Science Technology Co., Ltd. (Baidu
    Netcom) incorporated under the laws of the PRC on
    June 5, 2001,
    Beijing Perusal Technology Co., Ltd. (Beijing
    Perusal) incorporated under the laws of the PRC on
    June 6, 2006,
    Beijing BaiduPay Science and Technology Co., Ltd.
    (BaiduPay) incorporated under the laws of the PRC on
    February 27, 2008, and
    Baidu HR Consulting (Shanghai) Co., Ltd. (Baidu HR)
    incorporated under the laws of the PRC on December 28, 2010.  e-commerce e-commerce
 F-8




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      810-10 810-10), Consolidation: Overall
    Basis
    of Accounting
    Principles
    of Consolidation
    Use of
    Estimates
   F-9




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comparative
    Information
    Currency
    Translation for Financial Statements Presentation
    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Foreign
    Currency
  830-10 830-10), Foreign Currency Matters: Overall
  Cash
    and Cash Equivalents
  Cash
    and Cash Equivalents
    Restricted
    Cash
  e-commerce
  e-commerce e-commerce e-commerce
 F-10




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  e-commerce
  Investments
  Short-Term
    Investments
  320-10 320-10), Investments  Debt and Equity Securities: Overall. held-to-maturity, available-for-sale, ASC 320-10.
  held-to-maturity held-to-maturity ASC 320-10. held-to-maturity other-than-temporary other-than-temporary other-than-temporary
    held-to-maturity available-for-sale Available-for-sale available-for-sale other-than-temporary.
  Long-term
    Investments
  available-for-sale
  325-20 325-20), Investments-Other: Cost Method Investments other-than-temporary
 F-11




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    323-10 323-10), Investments-Equity Method and Joint Ventures: Overall ASC 323-10. other-than-temporary.
  available-for-sale ASC 320-10, Investments  Debt and Equity Securities: Overall, available-for-sale
  Fair
    Value Measurements of Financial Instruments
    Research,
    Development, and Computer Software
  Capitalization
    of Software Developed for Internal Use
  350-40 350-40), Intangibles-Goodwill and Other: Internal-Use Software
 F-12




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Research
    and Development Expenses
    Fixed
    Assets
    Office building

 45 yearsOffice building related facility, machinery and equipment

 15 yearsComputer equipment

 3 or 5 yearsInternal use software development costs

 3 yearsOffice equipment

 3 or 5 yearsVehicles

 5 yearsLeasehold improvements

 over the shorter of lease terms or estimated useful lives
    of the assets         Goodwill
    and Intangible Assets
  Goodwill
  350-20 350-20), Intangibles  Goodwill and Other: Goodwill ASC 350-20. ASC 350-20.
 F-13




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  ASC 350-20,
  Intangible
    Assets
      Domain names

 5.0 yearsCustomer relationships

 4.9 yearsNon-competition agreements

 3.9 yearsSoftware

 5.9 yearsContract-based assets

 2.3 yearsTrademark

 9.6 yearsLand use right

 50 years     350-30 350-30), Intangibles-Goodwill and Other: General Intangibles Other
    than Goodwill
  Impairment
    of Long-Lived Assets Other Than Goodwill
  360-10 360-10), Property, Plant and Equipment: Overall
 F-14




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounts
    Receivable
      Revenue
    Recognition
    Online
    marketing services
  pay-for-performance
  pay-for-performance 605-10 605-10), Revenue Recognition: Overall
      ASC 605-10.
    ASC 605-10,
 F-15




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         845-10 845-10), Nonmonetary Transactions: Overall
  605-20 605-20), Revenue recognition: Services
  505-50 505-50), Equity: Equity-based Payments to Non-Employees
  
    The date the parties come to a mutual understanding of the terms
    of the equity-based compensation arrangement and a commitment
    for performance by the Company to earn the equity instruments is
    reached;
    The date at which the Companys performance necessary to
    earn the equity instruments is completed.      605-25 605-25), Revenue recognition: Multiple-Element Arrangements
  605-50 605-50), Revenue recognition: Customer Payments and Incentives
  605-25.
 F-16




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ASC 605-10
  ASC 605-10
  Cost
    of Revenues
    605-45 605-45), Revenue Recognition: Principal Agent Considerations
  Advertising
    Expenses
    Other
    Income, net
   F-17




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Leases
    Income
    Taxes
    740-10 740-10), Income Taxes: Overall ASC 740-10
  Share-based
    Compensation
  718-10 718-10), Compensation-Stock Compensation: Overall 718-10,
  ASC 718-10
  505-50 505-50), Equity: Equity-based Payments to Non-Employees 505-50, ASC 718-10
 F-18




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Earnings
    Per Share (EPS)
  260-10 260-10), Earnings Per Share: Overall ASC 260-10,
  260-10 260-10), Earnings Per Share: Overall
    Concentration
    of Risks
  Concentration
    of credit risk
      Business
    and economic risks
   F-19




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Currency
    convertibility risk
    Foreign
    currency exchange rate risk
        Recent
    Accounting Pronouncements
  No. 2009-13 2009-13), Multiple-Deliverable Revenue Arrangements 2009-13 sub-topic 605-25 605-25), Revenue Recognition: Multiple-Element Arrangements
 F-20




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2009-13
  No. 2010-13 2010-13), Compensation-Stock Compensation ( Effect of Denominating the Exercise Price of a Share-Based
    Payment Award in the Currency of the Market in Which the
    Underlying Equity Security Trades 2010-13 2010-13
  No. 2010-28 2010-28), Intangibles  Goodwill and Other When to Perform Step 2 of the Goodwill Impairment
    Test for Reporting Units with Zero or Negative Carrying
    Amounts 2010-28
  No. 2010-29 2010-29), Disclosure of Supplementary Pro Forma Information for
    Business Combinations 2010-29
  3.
    INVESTMENTS  Short-term
    investments
  held-to-maturity
 F-21




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      As of December 31, 2009Gross


GrossUnrecognized


UnrecognizedAmortized


Holding


Holding


Fair


FairCost


Gains


Losses


Value


ValueRMB


RMB


RMB


RMB


US$(In thousands)Short-term investments:Held-to-maturity
    securities(1)Fixed-rate investments


381,149



354







381,503



57,803381,149



354







381,503



57,803   As of December 31, 2010Gross


GrossUnrecognized


UnrecognizedAmortized


Holding


Holding


Fair


FairCost


Gains


Losses


Value


ValueRMB


RMB


RMB


RMB


US$(In thousands)Short-term investments:Held-to-maturity
    securities(1)Fixed-rate investments


376,492



5



(1,263
)


375,234



56,854376,492



5



(1,263
)


375,234



56,854     (1)
    
    The Companys
    held-to-maturity
    securities are stated at amortized cost and the fair value is
    determined based on a discounted cash flow model using the
    discount curve of market interest rates.  Long-term
    investments
  available-for-sale
  Long-term
    available-for-sale
    securities
  available-for-sale
  series A-1 ASC 320-10, available-for-sale held-to-maturity available-for-sale
   F-22




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cost
    method investments
  E-commerce
  Equity
    method investments
      e-commerce
       F-23




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    ACCOUNTS
    RECEIVABLE  December 31,2009


2010


2010RMB


RMB


US$(In thousands)Accounts receivable


170,625



299,123



45,322Less: Allowance for doubtful accounts


(9,015
)


(2,223
)


(337
)161,610



296,900



44,985     2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)Balance at the beginning of the year


3,581



8,561



9,015



1,366Amounts charged to (credited against) costs and expenses


7,390



454



(6,792
)


(1,029
)Write-offs


(2,410
)










Balance at the end of the year


8,561



9,015



2,223



337   5.
    OTHER
    ASSETS, CURRENT  December 31,2009


2010


2010RMB


RMB


US$(In thousands)Deposits


13,736



22,832



3,460Advances to suppliers


8,965



14,913



2,260Prepaid expenses


8,026



33,275



5,042Interest receivable


5,469



5,994



908Receivables from employees


52,118



25,014



3,790Receivables from service provider


2,614



682



103Other


139



944



14391,067



103,654



15,706  F-24




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    FIXED
    ASSETS  December 31,2009


2010


2010RMB


RMB


US$(In thousands)Computer equipment


1,128,844



1,956,642



296,461Office building


363,198



391,895



59,378Office building related facility, machinery and equipment


118,844



137,542



20,840Internal-use software development costs


44,925



37,022



5,609Vehicles


4,020



6,829



1,035Office equipment


57,687



82,431



12,490Leasehold improvements


31,118



74,793



11,332Construction in progress


15,637



14,797



2,2421,764,273



2,701,951



409,387Less: Accumulated depreciation


(766,716
)


(1,079,539
)


(163,567
)997,557



1,622,412



245,820     7.
    GOODWILL
    AND INTANGIBLE ASSETS  Goodwill
    2009


2010


2010RMB


RMB


US$(In thousands)Balance as of January 1


51,082



63,691



9,650Goodwill acquired


12,609







Foreign currency translation adjustment






(5
)


(1
)Balance as of December 31


63,691



63,686



9,649  F-25




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Intangible
    assets
    As of December 31, 2009Gross





NetCarrying


Accumulated


CarryingValue


Amortization


ValueRMB


RMB


RMB(In thousands)Finite-lived:Land use right


97,611



(5,043
)


92,568Domain names


14,825



(14,567
)


258Customer relationships


31,363



(21,165
)


10,198Non-competition agreements


1,115



(936
)


179Software


8,814



(1,616
)


7,198Contract-based assets


338



(226
)


112Trademark


1,727



(55
)


1,672155,793



(43,608
)


112,185Indefinite-lived:Domain names


9,360







9,360Trademark


1,050







1,05010,410







10,410166,203



(43,608
)


122,595   As of December 31, 2010Gross





Net


NetCarrying


Accumulated


Carrying


CarryingValue


Amortization


Value


ValueRMB


RMB


RMB


US$(In thousands)Finite-lived:Land use right


97,611



(6,995
)


90,616



13,730Domain names


14,860



(14,774
)


86



13Customer relationships


31,408



(26,870
)


4,538



687Non-competition agreements


1,115



(1,062
)


53



8Software


12,131



(3,572
)


8,559



1,297Contract-based assets


338



(281
)


57



9Trademark


1,727



(248
)


1,479



224159,190



(53,802
)


105,388



15,968Indefinite-lived:Domain names


9,360







9,360



1,418Trademark


1,050







1,050



15910,410







10,410



1,577169,600



(53,802
)


115,798



17,545  F-26




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       RMB

US$(In thousands)For the year ending December 31,2011


7,944



1,2042012


5,455



8272013


4,488



6802014


3,166



4802015


2,815



427   8.
    ACCOUNTS
    PAYABLE AND ACCRUED LIABILITIES  December 31,2009


2010


2010RMB


RMB


US$(In thousands)Accrued payroll and welfare


95,412



150,160



22,752Accrued operating expenses


162,963



297,248



45,038Tax payable


147,656



295,432



44,762Distributors deposits


3,971



7,431



1,126Purchase of fixed assets


144,214



277,669



42,071Traffic acquisition costs


109,305



133,864



20,282Bandwidth costs


16,417



34,488



5,225Professional expenses


19,420



25,937



3,930Customers deposits on
    e-commerce
    platform


19,513



38,278



5,800Others


30,990



57,264



8,676749,861



1,317,771



199,662         9.
    INCOME
    TAXES   F-27




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    China
      2-year
    3-year
  2-year
     F-28




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Japan
      For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)PRC


1,360,326



1,907,575



4,321,910



654,834Non-PRC


(196,147
)


(224,454
)


(260,747
)


(39,507
)1,164,179



1,683,121



4,061,163



615,327     For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)Current income tax


129,885



222,778



616,994



93,483Income tax refund due to reduced transitional tax rate






(13,923
)


(6,625
)


(1,004
)Deferred income tax benefit


(58,553
)


(62,308
)


(129,415
)


(19,608
)Valuation allowance


44,739



51,470



55,041



8,340116,071



198,017



535,995



81,211  F-29




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)Expected taxation at PRC EIT statutory rate


291,045



420,780



1,015,329



153,837Effect of differing tax rates in different jurisdictions


3,533



5,101



8,416



1,275Permanent differences  non-taxable income


(2,121
)


(6,640
)


(733
)


(111
)Permanent differences  non-deductible expenses


2,703



9,001



10,935



1,656Tax incentives relating to R&D expenditures


(17,848
)


(9,125
)


(22,925
)


(3,473
)Effect of tax exemption and reduction inside PRC


(205,980
)


(258,647
)


(533,802
)


(80,879
)Income tax refund due to overpaid provisional tax






(13,923
)


(6,625
)


(1,004
)Addition of under-provided EIT for previous years










10,359



1,570Addition to valuation allowance


44,739



51,470



55,041



8,340Taxation for the year


116,071



198,017



535,995



81,211Effective tax rate


9.97
%


11.76
%


13.20
%


13.20
%Basic earnings per share for Class A and Class B
    ordinary shares effect of tax exemptions and reductions inside
    the PRC


6.02



7.48



15.34



2.32       December 31,2009


2010


2010RMB


RMB


US$(In thousands)Provision for doubtful receivables


2,103



1,964



298Fixed assets depreciation


37,800



41,089



6,225Net operating loss carry-forward


117,964



173,644



26,310Accrued expenses, payroll and others


10,007



80,592



12,211Deferred tax assets


167,874



297,289



45,044Valuation allowance


(124,918
)


(179,959
)


(27,267
)Deferred tax assets, net


42,956



117,330



17,777      F-30




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ASC 740-10. ASC 740-10
    2007-2010 2007-2010
  10.
    LOANS
    PAYABLE, NONCURRENT    Principal AmountDue Date

RMB


US$(In thousands)July 30, 2012


23,000



3,485October 30, 2012


23,000



3,485January 30, 2013


23,000



3,485April 30, 2013


17,000



2,57586,000



13,030   11.
    EMPLOYEE
    DEFINED CONTRIBUTION PLAN   F-31




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    COMMITMENTS
    AND CONTINGENCIES  Capital
    commitments
    Operating
    lease commitments
      RMB


US$(In thousands)2011


259,927



39,3832012


171,275



25,9512013


151,748



22,9922014


111,659



16,9182015


75,457



11,433Thereafter


79,749



12,083849,815



128,760   Guarantees
  460-10 460-10), Guarantees: Overall ASC 460-10, ASC 460-10
     F-32




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Litigation
      13.
    SHAREHOLDERS
    EQUITY  Ordinary
    shares
      Comprehensive
    Income
    Retained
    earnings
   F-33




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        December 31,2009


2010


2010RMB


RMB


US$(In thousands)PRC statutory reserve funds


187,675



238,107



36,077Unreserved retained earnings


3,252,854



6,727,590



1,019,3323,440,529



6,965,697



1,055,409    F-34




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    EARNINGS
    PER SHARE (EPS)  ten-for-one
      For the Years Ended December 31,2008


2009


2010Class A


Class B


Class A


Class B


Class A


Class A


Class B


Class BRMB


RMB


RMB


RMB


RMB


US$


RMB


US$Earnings per share  basic:NumeratorAllocation of undistributed earnings


772,330



275,778



1,107,191



377,913



2,690,712



407,683



834,456



126,433DenominatorWeighted average ordinary shares outstanding


25,214,154



9,003,290



25,773,593



8,797,198



26,566,454



26,566,454



8,238,907



8,238,907Denominator used for earnings per share


25,214,154



9,003,290



25,773,593



8,797,198



26,566,454



26,566,454



8,238,907



8,238,907Earnings per share  basic


30.63



30.63



42.96



42.96



101.28



15.35



101.28



15.35Earnings per share  diluted:NumeratorAllocation of undistributed earnings for diluted computation


765,509



282,599



1,107,067



378,037



2,693,365



408,085



831,803



126,031Reallocation of undistributed earnings as a result of conversion
    of Class B to Class A shares


282,599







378,037







831,803



126,031







Allocation of undistributed earnings


1,048,108



282,599



1,485,104



378,037



3,525,168



534,116



831,803



126,031DenominatorWeighted average ordinary shares outstanding


25,214,154



9,003,290



25,773,593



8,797,198



26,566,454



26,566,454



8,238,907



8,238,907Conversion of Class B to Class A ordinary shares


9,003,290







8,797,198







8,238,907



8,238,907







Share-based awards


500,046



357,512



205,576



55,210



112,474



112,474



350



350Denominator used for earnings per share


34,717,490



9,360,802



34,776,366



8,852,408



34,917,835



34,917,835



8,239,257



8,239,257Earnings per share  diluted


30.19



30.19



42.70



42.70



100.96



15.30



100.96



15.30Earnings per ADS:Denominator used for earnings per ADS  basic


252,141,540







257,735,930







265,664,540



265,664,540







Denominator used for earnings per ADS  diluted


347,174,900







347,763,660







349,178,350



349,178,350







Earnings per ADS  basic


3.06







4.30







10.13



1.53







Earnings per ADS  diluted


3.02







4.27







10.10



1.53







  F-35




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    SHARE-BASED
    AWARDS PLAN  Incentive
    Compensation Plans
  36-month
         F-36




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverage


AggregateWeighted

Remaining


IntrinsicNumber of


Average

Contractual


Value (US$)Share Option

Shares


Exercise Price

Life (Years)


(In thousands)Outstanding, December 31, 2009


154,674


US$110.80


2.56



46,469Granted


23,729


US$610.08Exercised


(59,068
)

US$92.00Forfeited/Cancelled


(19,175
)

US$133.49Expired


(985
)

US$17.95Outstanding, December 31, 2010


99,175


US$237.99


2.57



72,164Vested and expected to vest at December 31, 2010


94,655


US$232.69


2.52



69,375Exercisable at December 31, 2010


55,089


US$115.11


1.4



46,836         ASC 718-10,
  Restricted
    Shares
    WeightedAverageNumber of


Grant DateRestricted Shares

Shares


Fair ValueNonvested, December 31, 2009


47,694


US$
224.34Granted


44,390


US$
701.15Vested


(37,312
)

US$
220.09Forfeited


(5,155
)

US$
329.26Nonvested, December 31, 2010


49,617


US$
643.22  F-37




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     718-10 718-10), Compensation-Stock Compensation: Overall
    2008

2009

2010Risk-free interest rate

1.74%~2.60%

1.18%

0.61%~1.13%Dividend yield





Expected volatility range

63.52%~70.82%

85.43%

64.76%~69.70%Weighted average expected volatility

66.54%

85.43%

68.12%Expected life (in years)

1.63~2.64

2.65

2.65~2.66           For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)Cost of revenues


4,542



6,374



6,302



955Selling, general and administrative


41,651



38,681



36,811



5,577Research and development


37,784



41,263



50,623



7,670Share-based compensation cost capitalized as part of internally
    used software in fixed assets


2,706



1,217



226



3586,683



87,535



93,962



14,237  F-38




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  16.
    RELATED
    PARTY TRANSACTIONS      17.
    SEGMENT
    REPORTING  280-10 280-10), Segment Reporting: Overall
      For the Years Ended December 31,2008


2009


2010


2010RMB


RMB


RMB


US$(In thousands)Revenues:PRC


3,194,635



4,441,580



7,898,805



1,196,789Non-PRC


3,617



6,196



16,269



2,4653,198,252



4,447,776



7,915,074



1,199,254     December 31,2009


2010


2010RMB


RMB


US$(In thousands)Long-lived assets:PRC


1,093,681



1,785,511



270,532Non-PRC


49,720



45,872



6,9501,143,401



1,831,383



277,482   18.
    FAIR
    VALUE MEASUREMENT  820-10 820-10), Fair Value Measurements and Disclosures: Overall,
  Level 1
  Level 2
  Level 3
  820-10
 F-39




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets
    and liabilities measured at fair value on a recurring
    basis
  ASC 820-10, held-to-maturity, available-for-sale held-to-maturity available-for-sale available-for-sale
  available-for-sale available-for-sale
    Fair Value Measurement at December 31, 2009 UsingQuoted Prices in


Significant Other


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


Inputs


Total Fair Value at(Level 1)


(Level 2)


(Level 3)


December 31, 2009(RMB)


(RMB)


(RMB)


(RMB)


(US$)Cash equivalents:Time deposits


1,658,678











1,658,678



251,315Money market fund


234,782











234,782



35,573Short-term investments:Held-to-maturity
    securitiesFixed-rate investments






381,503







381,503



57,8031,893,460



381,503







2,274,963



344,691   F-40




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair Value Measurement at December 31, 2010 UsingQuoted Prices in


Significant Other


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


Inputs


Total Fair Value at(Level 1)


(Level 2)


(Level 3)


December 31, 2010(RMB)


(RMB)


(RMB)


(RMB)


(US$)Cash equivalents:Time deposits


3,905,479











3,905,479



591,739Money market fund


993,047











993,047



150,461Short-term investments:Held-to-maturity
    securitiesFixed-rate investments






375,234







375,234



56,854Long-term investmentsAvailable-for-sale
    securities










24,814



24,814



3,7604,898,526



375,234



24,814



5,298,574



802,814     Significant Unobservable Inputs(Level 3)(RMB)


(US$)Balance at December 31, 2009






Purchases


24,814



3,760Change in unrealized gain (loss) included in other comprehensive
    income






Balance at December 31, 2010


24,814



3,760   Assets
    and liabilities measured at fair value on a nonrecurring
    basis
  other-than-temporarily
    19.
    SUBSEQUENT
    EVENTS   F-41




---



##### Table of Contents



BAIDU,
    INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     F-42