bidu formally launched our Japanese search service in January 2008, how much they invested in Japan
We formally launched our Japanese search service in January 2008, after completing a 10-month Beta test
for the service. We have limited experience operating in the Japanese market. Moreover, our Japan operations
have incurred operating losses since the inception in December 2006, and it is uncertain when the business will
become profitable, if at all. Additional future losses in our Japan operations could have an adverse effect on our
overall results of operations.
The Japanese search market is highly competitive and currently is dominated primarily by Google, which
has significantly greater financial resources, longer operating history and more experience in the Japanese search
market than we do. Moreover, other local providers of competing search services may also have a substantial
advantage over us in attracting users due to their more established brands in Japan, greater knowledge with
respect to the tastes and preferences of Japanese users and their focus on the Japanese market. If we cannot
compete successfully with these competitors in the Japanese language search market, our business in Japan could
be adversely affected.