Baidu.com Inc, China's leading search engine, is cutting its projected revenue by up to 15 percent after it dropped some advertisers because of a scandal over unlicensed companies selling medical products.

Fourth-quarter sales are expected to be 890 million yuan to 900 million yuan (US$131 million-US$133 million), down from the previously forecast 1.025 billion yuan to 1.055 billion yuan, the company said in a filing Friday with the US Securities and Exchange Commission.

Baidu said the revenue reduction was due to China's economic slowdown and the removal of listings for medical advertisers that failed to provide licenses and some other "questionable" advertisers. It gave no indication it expects a long-term impact.

Baidu was jolted in November after Chinese state television reported that it allowed unlicensed medical suppliers to use its paid-search service, which lets customers pay for higher rankings on its results page. The company's US-traded shares fell 30 percent in the first trading session after the report.

Baidu said at the time it was not legally required to confirm that advertisers were licensed. But industry analysts said it had to take action to reassure customers amid a string of scandals over deaths and injuries caused by tainted or counterfeit milk, medicines and other products.

Baidu has some 60 percent of China's search market, well ahead of No. 2 Google Inc, and said profit in the last quarter rose 91 percent from a year earlier.

(China Daily December 15, 2008)