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Tragedy Strikes Chinese Search Engine Giant

The tragic and sudden death of Baidu's CFO, Shawn Wang, saw two-and-a-quarter percent of the company's value lost on NASDAQ earlier this week.

Despite only having been with the company for three years (joining in September 2004), Wang aided Baidu with listing on NASDAQ in August 2005, and he had established strong procedures and operating frameworks for several departments within Baidu. These strong frameworks are likely to lessen the impact of the loss, coming just last week as Wang was swimming while on his Christmas holiday on Hainan Island.

The sudden loss of any key employee, whether they are executive level or not, can have widespread effects within a company, including the loss of key business, the loss of competitive advantages, or in rare cases, even the loss of the business. Wang's sudden loss may impact Baidu's plans to list on the Hong Kong exchange and exposure on the Chinese A-share stock market. Other plans, such as Baidu's plan to compete with Taobao.com, are not as likely to have been affected by this incident, given Wang's limited strategic and operational role (largely being limited to financial roles).

With senior management and senior financial employees currently taking on the duties that Wang was responsible for, it has already been suggested that his successor will be Haoyu Shen, Baidu's current VP of Business Operations.

2 January 2008

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