Baidu announces major overhaul following hospital scandal

The recent scandal in which a university student died due to a disqualified hospital recommended by Baidu’s search engine has led to heated discussions on China’s healthcare system and corporate ethics.

According to NASDAQ, Baidu’s stock price has plummeted from USD 194.30 to USD 169.49 in the past 10 days. On Tuesday, Baidu CEO Robin Li sent a public letter to all Baidu employees, saying that the blind pursuit of KPI which has decreased Baidu’s value must stop, and that the company will take three resolute steps to live up to its responsibilities.

Firstly, Baidu plans to overhaul its entire business model and make sure that no service is commercialized at the expense of user experience. Secondly, Baidu will perfect its user feedback system and let users’ opinions be a key factor in determining its search result rankings. Thirdly, it will establish a RMB one billion (USD 153.4 million) fund for user compensation in order to guarantee their rights and interests.

In the letter, Li recalled how Baidu won the hearts and minds of Chinese users in the beginning. “But today, I see departments arguing over KPI and senior engineers fumbling to balance commercial interests with user experience,” he said. “Without support from our users, if we prioritize profit and betray our initial promise, Baidu may turn into smoke and ashes in 30 days!”

In response to the results of the joint investigation initiated last Tuesday, Baidu has taken down information on 2,518 medical establishments along with 126 million advertisements from its search engine. Baidu’s president Xiang Hailong has also announced future procedures including examining ads with medical information and screening for false or misleading information. Baidu will also replace its paid ranking system with a ranking system based on credibility, though its paid rankings will remain as a secondary reference.

(Top photo from Baidu Images)

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