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1、Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934 or ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal
2、year ended December 31,2022.or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to or SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company reportFor t
3、he transition period from to Commission file number:000-51469Baidu,Inc.(Exact name of Registrant as specified in its charter)N/A(Translation of Registrants name into English)Cayman Islands(Jurisdiction of incorporation or organization)Baidu CampusNo.10 Shangdi 10th StreetHaidian District,Beijing 100
4、085The Peoples Republic of China(Address of principal executive offices)Rong Luo,Chief Financial OfficerTelephone:+(86 10)5992-8888Email:Facsimile:+(86 10)5992-0000Baidu CampusNo.10 Shangdi 10th Street,Haidian District,Beijing 100085The Peoples Republic of China(Name,Telephone,Email and/or Facsimile
5、 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 Trading Symbol Name of Each Exchange on Which RegisteredAmerican depositary shares(each American depositary share representing eight Class Aordinary shares,
6、par value US$0.000000625 per share)BIDU The Nasdaq Stock Market LLC(The Nasdaq Global Select Market)Class A ordinary shares,par value US$0.000000625 per share*The Nasdaq Stock Market LLC(The Nasdaq Global Select Market)Class A ordinary shares,par value US$0.000000625 per share 9888 The Stock Exchang
7、e of Hong Kong Limited*Not for trading,but only in connection with the listing on The Nasdaq Global Select Market of American depositary shares.Securities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursu
8、ant to Section 15(d)of the Act:None(Title of Class)Indicate the number of outstanding shares of each of the Issuers classes of capital or common stock as of the close of the period covered by the annual report 2,254,485,072 Class A ordinary shares and 542,100,320 Class B ordinary shares,par valueUS$
9、0.000000625 per share,as of December 31,2022.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No If this report is an annual or transition report,indicate by check mark if the registrant is not required to file reports pursuant
10、 to Section 13 or 15(d)of the Securities Exchange Act of 1934.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant w
11、as required to file suchreports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically,if any,every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of thi
12、s chapter)during the preceding 12 months(or for such shorterperiod that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer or an emerging growth company.See definition of“lar
13、ge accelerated filer,”“accelerated filer”“emerging growth company”in Rule 12b-2of the Exchange Act.(Check one):Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indi
14、cate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a)of the Exchange Act.The term“new or revised financial accounting standard”refers to any update issued by th
15、e Financial Accounting Standards Board to its Accounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting underSection 404(
16、b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the
17、correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period
18、pursuant to240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked
19、in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18 If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No (APPLICABL
20、E ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a
21、 plan confirmed by acourt.Yes No Table of ContentsTABLE OF CONTENTS INTRODUCTION 1 FORWARD-LOOKING INFORMATION 2 PART I 3 Item 1.Identity of Directors,Senior Management and Advisers 3 Item 2.Offer Statistics and Expected Timetable 3 Item 3.Key Information 3 Item 4.Information on the Company 91 Item
22、4A.Unresolved Staff Comments 151 Item 5.Operating and Financial Review and Prospects 151 Item 6.Directors,Senior Management and Employees 188 Item 7.Major Shareholders and Related Party Transactions 201 Item 8.Financial Information 202 Item 9.The Offer and Listing 205 Item 10.Additional Information
23、206 Item 11.Quantitative and Qualitative Disclosures about Market Risk 215 Item 12.Description of Securities Other than Equity Securities 216 PART II 220 Item 13.Defaults,Dividend Arrearages and Delinquencies 220 Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds 22
24、0 Item 15.Controls and Procedures 220 Item 16A.Audit Committee Financial Expert 221 Item 16B.Code of Ethics 221 Item 16C.Principal Accountant Fees and Services 221 Item 16D.Exemptions from the Listing Standards for Audit Committees 221 Item 16E.Purchases of Equity Securities by the Issuer and Affili
25、ated Purchasers 222 Item 16F.Change in Registrants Certifying Accountant 222 Item 16G.Corporate Governance 222 Item 16H.Mine Safety Disclosure 222 Item 16I.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 222 PART III 223 Item 17.Financial Statements 223 Item 18.Financial Statemen
26、ts 223 Item 19.Exhibits 223 SIGNATURES 236 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 iTable of ContentsINTRODUCTIONIn this annual report,except where the context otherwise requires and for purposes of this annual report only:“ADSs”refers to our American depositary shares,each ADSs representing
27、eight Class A ordinary shares;“China”or“PRC”refers to the Peoples Republic of China,including Hong Kong,Macau and Taiwan;and“mainland China”refers to thePeoples Republic of China,excluding Hong Kong,Macau and Taiwan;“Class A ordinary shares”refers to Class A ordinary shares of the share capital of o
28、ur company with a par value of US$0.000000625 each,conferring a holder of a Class A ordinary share one vote per share on all matters submitted for voting at general meetings of our company;“Class B ordinary shares”refers to Class B ordinary shares of the share capital of our company with a par value
29、 of US$0.000000625 each,conferring weighted voting rights in our company such that a holder of a Class B ordinary share is entitled to 10 votes per share on allmatters submitted for voting at general meetings of our company;“DAU”,or daily active user,refers to the average number of mobile devices th
30、at launched our mobile apps at least once during a daywithin a specific period;“Hong Kong”or“HK”or“Hong Kong S.A.R.”are to the Hong Kong Special Administrative Region of the PRC;“Hong Kong Listing Rules”are to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited,a
31、samended or supplemented from time to time;“Hong Kong Share Registrar”are to Computershare Hong Kong Investor Services Limited;“Hong Kong Stock Exchange”are to The Stock Exchange of Hong Kong Limited;“Main Board”are to the stock market(excluding the option market)operated by the Hong Kong Stock Exch
32、ange which is independentfrom and operated in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;“MAU”,or monthly active user,refers to the number of mobile devices that launched our mobile apps during a given month;“our company”refers to Baidu,Inc.,which is not a PRC operati
33、ng company but a Cayman Islands holding company with operationsprimarily conducted through(i)our mainland China subsidiaries and(ii)contractual arrangements with the variable interest entities,or theVIEs,based in mainland China.This structure entails unique risks to investors,see“Item 3.D.Key Inform
34、ationRisk FactorsRisksRelated to our Corporate Structure”for more details;“RMB”or“Renminbi”refers to the legal currency of mainland China;“SFO”refers to the Securities and Futures Ordinance(Chapter 571 of the Laws of Hong Kong),as amended or supplemented from time totime;“shares”or“ordinary shares”r
35、efers to our ordinary shares,which include both Class A ordinary shares and Class B ordinary shares;“user traffic”or“traffic”refers generally to page views of a website,with“page views”measuring the number of web pages viewed byinternet users over a specified period of time except that multiple page
36、 views of the same page viewed by the same user on the same dayare counted only once;“U.S.GAAP”refers to generally accepted accounting principles in the United States;1Table of Contents “we,”“us,”“our,”or“Baidu”refers to Baidu,Inc.,its subsidiaries,and,in the context of describing our operations and
37、 consolidatedfinancial information,the variable interest entities in mainland China,including,but not limited to,Beijing Baidu Netcom ScienceTechnology Co.,Ltd.,or Baidu Netcom,Beijing Perusal Technology Co.,Ltd.,or Beijing Perusal,Beijing iQIYI Science&TechnologyCo.,Ltd.,or Beijing iQIYI,and all of
38、 the variable interest entities are domestic companies incorporated in mainland China in which we donot have any equity ownership but whose financial results have been consolidated into our consolidated financial statements based solelyon contractual arrangements in accordance with U.S.GAAP.See“Item
39、 4.Information on the CompanyC.Organizational Structure”foran illustrative diagram of our corporate structure;“iQIYI”refers to iQIYI,Inc.,a company incorporated in the Cayman Islands listed on Nasdaq under the symbol“IQ”and one of oursubsidiaries;“$,”“dollars,”“US$”or“U.S.dollars”refers to the legal
40、 currency of the United States;and all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due torounding.On March 1,2021,Baidu,Inc.effected a change to its authorized share capital by 1-to-80 subdivision of shares.Concurrently,Bai
41、du,Inc.effecteda proportionate change in ADS to Class A ordinary share ratio from 10 ADSs representing 1 Class A ordinary share to each ADS representing 8 Class Aordinary shares,or the Share Subdivision.Such changes been reflected retroactively throughout this document.FORWARD-LOOKING INFORMATIONThi
42、s annual report on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events.Thesestatements are made under the“safe harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.You can identify these forward-looking statements by
43、 terminology such as“may,”“will,”“expect,”“anticipate,”“future,”“intend,”“plan,”“believe,”“estimate,”“is/are likely to”orother similar expressions.We have based these forward-looking statements largely on our current expectations and projections about future events andfinancial trends that we believ
44、e may affect our financial condition,results of operations,business strategy and financial needs.These forward-lookingstatements include,but are not limited to:our operations and business prospects;our business and operating strategies and our ability to implement such strategies;our ability to deve
45、lop and manage our operations and business;competition for,among other things,capital,technology and skilled personnel;our ability to control costs;our ability to identify and conduct investments and acquisitions,obtain relevant regulatory approvals from governmental authorities,aswell as integrate
46、acquired target(s);changes to regulatory and operating conditions in the industry and geographical markets in which we operate;our dividend policy;and all other risks and uncertainties described in“Item 3.D.Key InformationRisk Factors.”We would like to caution you not to place undue reliance on thes
47、e forward-looking statements and you should read these statements in conjunctionwith the risk factors disclosed in“Item 3.D.Key InformationRisk Factors.”Those risks are not exhaustive.We operate in a rapidly evolvingenvironment.New risks emerge from 2Table of Contentstime to time and it is impossibl
48、e for our management to predict all risk factors,nor can we assess the impact of all factors on our business or the extentto which any factor,or combination of factors,may cause actual results to differ from those contained in any forward-looking statement.We do notundertake any obligation to update
49、 or revise the forward-looking statements except as required under applicable law.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this annual report are made at a rateof RMB6.8972 to US$1.00,the exchange rate in effect as of December 30,2022 a
50、s set forth in the H.10 statistical release of The Board of Governors ofthe Federal Reserve System.We make no representation that any Renminbi or U.S.dollar amounts could have been,or could be,converted into U.S.dollars or Renminbi,as the case may be,at any particular rate,or at all.PART I Item 1.Id
51、entity of Directors,Senior Management and AdvisersNot applicable.Item 2.Offer Statistics and Expected TimetableNot applicable.Item 3.Key InformationOur Corporate Structure and Contractual Arrangements with the Variable Interest EntitiesBaidu,Inc.is not a PRC operating company but a Cayman Islands ho
52、lding company with operations primarily conducted through(i)oursubsidiaries incorporated in mainland China,or mainland China subsidiaries,and(ii)contractual arrangements with the variable interest entities based inmainland China.Our internet content services,value-added telecommunication-based servi
53、ces,internet map services,online audio and video servicesand mobile application distribution businesses in mainland China have been conducted through the applicable VIEs in order to comply with the laws andregulations of mainland China,which restrict and impose conditions on foreign direct investmen
54、t in companies involved in the provision of suchbusinesses.Accordingly,we operate these businesses in mainland China through the variable interest entities,and rely on contractual arrangementsamong Baidu,Inc./iQIYI,Inc.,our mainland China subsidiaries,the variable interest entities and their nominee
55、 shareholders to control the businessoperations of the variable interest entities.External revenues contributed by the variable interest entities accounted for 43%,44%and 47%of our totalexternal revenues for the years ended December 31,2020,2021 and 2022,respectively.As used in this annual report,“o
56、ur company”refers to Baidu,Inc.,whereas“we,”“us,”“our,”or“Baidu”refers to Baidu,Inc.,its subsidiaries,and,in the context of describing our operations and consolidatedfinancial information,the variable interest entities in mainland China and all of the variable interest entities are domestic companie
57、s incorporated inmainland China in which we do not have any equity ownership but whose financial results have been consolidated into our consolidated financialstatements based solely on contractual arrangements in accordance with U.S.GAAP.Investors in our ADSs are not purchasing equity interest in t
58、hevariable interest entities in mainland China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands.Our subsidiaries,the variable interest entities and their shareholders have entered into a series of contractual agreements.These contractualarrangements:
59、enable us to receive the economic benefits that could potentially be significant to the variable interest entities in consideration for theservices provided by our subsidiaries;effectively assigned all of the voting rights underlying the nominee shareholders equity interest in the variable interest
60、entities to us;and 3Table of Contents enable us to hold an exclusive option to purchase all or part of the equity interests in the variable interest entities when and to the extentpermitted by the laws of mainland China.These contractual arrangements among Baidu,Inc./iQIYI,Inc.,our subsidiaries,the
61、variable interest entities and their shareholders generallyinclude shareholder voting rights trust agreements or proxy agreements,exclusive equity purchase and transfer option agreements or exclusive purchaseoption agreements,loan agreements,operating agreements or business operation agreements,excl
62、usive technology consulting and services agreements,and equity pledge agreements,as the case may be.As for some of the variable interest entities,our subsidiaries have entered into additional businesscooperation agreements,power of attorney,license agreements and/or commitment letters(as the case ma
63、y be)with these variable interest entities andtheir respective shareholders.Terms contained in each set of contractual arrangements with the variable interest entities and their respective shareholdersare substantially similar.As a result of the contractual arrangements,the shareholders of the varia
64、ble interest entities effectively assigned all of theirvoting rights underlying their equity interest in the variable interest entities to the primary beneficiaries of these companies,which gives our company orits subsidiaries/iQIYI the power to direct the activities that most significantly impact t
65、he variable interest entities economic performance.The nomineeshareholders of Baidu Netcom,Beijing Perusal and Beijing iQIYI,the variable interest entities,are directors or members of senior management of us oriQIYI.We or iQIYI consider such people suitable to act as the nominee shareholders of thes
66、e variable interest entities because of,among otherconsiderations,their contribution to us or iQIYI,their competence and their length of service with and loyalty to us or iQIYI.For more details of thesecontractual arrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractua
67、l Arrangements with the Variable InterestEntities and the Nominee Shareholders.”However,the contractual arrangements may not be as effective as direct ownership in providing us with control over the variable interest entitiesand we may incur substantial costs to enforce the terms of the arrangements
68、.If the variable interest entities or the nominee shareholders fail to performtheir respective obligations under the contractual arrangements,we could be limited in our ability to enforce the contractual arrangements thateffectively assigned us the voting rights in the variable interest entities,and
69、 these agreements have not been tested in the courts of mainland China.Furthermore,if we are unable to maintain such effective assignment,we would not be able to continue to consolidate the financial results of theseentities in our financial statements.See“Item 3.D.Key InformationRisk FactorsRisks R
70、elated to Our Corporate StructureOur contractualarrangements with the variable interest entities in mainland China and the individual nominee shareholders may not be as effective in providing controlover these entities as direct ownership”and“Item 3.D.Key InformationRisk FactorsRisks Related to Our
71、Corporate StructureThe individualnominee shareholders of the variable interest entities may have potential conflicts of interest with us,which may adversely affect our business.We donot have any arrangements in place to address such potential conflicts.”There are also substantial uncertainties regar
72、ding the interpretation and application of current and future laws,regulations and rules of mainlandChina regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the variable interestentities and their nominee shareholders.It is unce
73、rtain whether any new laws or regulations of mainland China relating to variable interest entitystructures will be adopted or if adopted,what they would provide.If we or any of the variable interest entities is found to be in violation of any existingor future laws or regulations of mainland China,o
74、r fail to obtain or maintain any of the required permits or approvals,the relevant PRC regulatoryauthorities would have broad discretion in accordance with the applicable laws and regulations to take action in dealing with such violations or failures.See“Item 3.D.Key InformationRisk FactorsRisks Rel
75、ated to Our Corporate StructureLaws and regulations of mainland China governing ourbusinesses and the validity of certain of our contractual arrangements are uncertain.If we are found to be in violation,we could be subject to sanctions.In addition,changes in the laws and regulations of mainland Chin
76、a or changes in interpretations thereof may materially and adversely affect ourbusiness.”Our operations are primarily conducted in mainland China through(i)our mainland China subsidiaries and(ii)contractual arrangements with thevariable interest entities based in mainland China,and revenues are 4Tab
77、le of Contentsprimarily generated from mainland China.Though the Foreign Investment Law does not explicitly classify contractual arrangements as a form offoreign investment,the definition of“foreign investment”thereunder is relatively wide and contains a catch-all provision which includes investment
78、smade by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.Therefore,there is no assurance that foreign investment via contractual arrangement would not be interpreted as a type of indirect foreign investment activities
79、inthe future.If any of the variable interest entities were deemed as a foreign-invested enterprise under any such future laws,administrative regulations orprovisions and any of our business would be included in any negative list or other form of restrictions on foreign investment,we may need to take
80、further actions to comply with such future laws,administrative regulations or provisions.Such actions may have a material and adverse impact on ourbusiness,financial condition,result of operations and prospects.In addition,if the PRC regulatory authorities were to find our legal structure andcontrac
81、tual arrangements to be in violation of any laws,administrative regulations or provisions of mainland China,we are uncertain what impact ofabove PRC regulatory authorities actions would have on us and our ability to consolidate the variable interest entities in the consolidated financialstatements.F
82、or more details,see“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business in ChinaUncertainties exist withrespect to the interpretation and implementation of the PRC Foreign Investment Law and its Implementation Regulations and how it may impact theviability of our current corporate st
83、ructure,corporate governance and business operations.”Our corporate structure is subject to risks associated with our contractual arrangements with the variable interest entities.Our company and itsinvestors may never have a direct ownership interest in the businesses that are conducted by the varia
84、ble interest entities.Uncertainties in the PRC legalsystem could limit our ability to enforce these contractual arrangements,and these contractual arrangements have not been tested in a court of law.If thePRC government finds that the agreements that establish the structure for operating our busines
85、s in mainland China do not comply with the laws andregulations of mainland China,or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,weand the variable interest entities could be subject to severe penalties or be forced to relinqu
86、ish our interests in those operations.This would result in thevariable interest entities being deconsolidated.The majority of our assets,including the necessary licenses to conduct business in mainland China,areheld by the variable interest entities.A significant part of our revenues are generated b
87、y the variable interest entities.An event that results in thedeconsolidation of the variable interest entities would have a material effect on our operations and result in the value of the securities of our companydiminish substantially or even become worthless.Our company,our mainland China subsidi
88、aries and the variable interest entities,and investors of ourcompany face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements withthe variable interest entities and,consequently,significantly affect the financial perfo
89、rmance of the variable interest entities and our company as awhole.Baidu,Inc.may not be able to repay its indebtedness,and the Class A ordinary shares or ADSs of our company may decline in value or becomeworthless,if we are unable to assert our contractual control rights over the assets of our mainl
90、and China subsidiaries and the variable interest entitiesthat conduct all or substantially all of our operations.For a detailed description of the risks associated with our corporate structure,please refer to risksdisclosed under“Item 3.D.Key InformationRisk FactorsRisks Related to Our Corporate Str
91、ucture.”Our company and the variable interest entities face various risks and uncertainties related to doing business in China.For example,we face risksassociated with regulatory approvals on offshore offerings,antimonopoly regulatory actions,and oversight on cybersecurity and data privacy.Theserisk
92、s could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability tocontinue to offer securities to investors,or adversely affect the value of such securities.For a detailed description of risks related to doing business inCh
93、ina,see“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business in China.”PRC governments certain administrative measures in regulating(i)our operations and(ii)offerings conducted overseas by,and foreigninvestment in,China-based issuers,could significantly limit or completely hinder our
94、ability to offer or continue to offer securities to investors.Implementation of industry-wide 5Table of Contentsregulations,including data security or anti-monopoly related regulations,in this nature may result in adverse effect on the value of such securities.Formore details,see“Item 3.D.Key Inform
95、ationRisk FactorsRisks Related to Doing Business in ChinaFailure to meet the PRC governmentscomplex regulatory requirements on our business operation could have a material adverse effect on our operations and the value of our securities.”Risks and uncertainties arising from the PRC legal system,incl
96、uding risks and uncertainties regarding the enforcement of laws and quicklyevolving rules and regulations in mainland China,could result in a material adverse change in our operations and the value of our ADSs.For moredetails,see“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business in
97、 ChinaUncertainties exist with respect to theinterpretation and implementation of the PRC Foreign Investment Law and its Implementation Regulations and how it may impact the viability of ourcurrent corporate structure,corporate governance and business operations.”The Holding Foreign Companies Accoun
98、table ActPursuant to the Holding Foreign Companies Accountable Act,or the HFCAA,if the Securities and Exchange Commission,or the SEC,determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public CompanyAccounting Over
99、sight Board,or the PCAOB,for two consecutive years,the SEC will prohibit our shares or the ADSs from being traded on a nationalsecurities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued a report to notify the SECof its determination that t
100、he PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainlandChina and Hong Kong,including our auditor.In April 2022,the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAAfollowing the filing of our annual report on Fo
101、rm 20-F for the fiscal year ended December 31,2021.On December 15,2022,the PCAOB issued a reportthat vacated its December 16,2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable toinspect or investigate completely registered public accounting
102、firms.For this reason,we do not expect to be identified as a Commission-Identified Issuerunder the HFCAA after we file this annual report on Form 20-F.Each year,the PCAOB will determine whether it can inspect and investigate completelyaudit firms in mainland China and Hong Kong,among other jurisdict
103、ions.If the PCAOB determines in the future that it no longer has full access toinspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of thesejurisdictions to issue an audit report on our financial statements filed with
104、the SEC,we would be identified as a Commission-Identified Issuer followingthe filing of the annual report on Form 20-F for the relevant fiscal year.There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year,and if we were so identified for
105、two consecutive years,we would become subject to the prohibition on tradingunder the HFCAA.See“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business in ChinaThe PCAOB had historically beenunable to inspect our auditor in relation to their audit work performed for our financial statemen
106、ts and the inability of the PCAOB to conduct inspectionsof our auditor in the past has deprived our investors with the benefits of such inspections.”and“Item 3.D.Key InformationRisk FactorsRisksRelated to Doing Business in ChinaOur ADSs may be prohibited from trading in the United States under the H
107、FCAA in the future if the PCAOB isunable to inspect or investigate completely auditors located in China.The delisting or prohibition of trading of the ADSs,or the threat of their beingdelisted or prohibited from trading,may materially and adversely affect the value of your investment.”Permissions Re
108、quired from the PRC Government Authorities for Our OperationsWe conduct our business primarily through our subsidiaries and the variable interest entities in mainland China.Our operations in mainland Chinaare governed by the laws and regulations of mainland China.As of the date of this annual report
109、,our mainland China subsidiaries and the variableinterest entities have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of oursubsidiaries and the variable interest entities in mainland China,including,among others,the Val
110、ue-Added Telecommunication Business OperatingLicense,the Internet News Information Service License,the 6Table of ContentsShort Messaging Service Access Code Certificate,the Online Audio/Video Program Transmission License,the Radio and Television ProgramProduction License,the Surveying and Mapping Qu
111、alification Certificate for internet map services,the Internet Culture Business Permit,the PublicationBusiness Operating License,the Filing Certificate for Internet Drug and Medical Devices Information Services/the Qualification Certificate for InternetDrug Information Services,the Human Resource Se
112、rvices License,the Filing Certificate for the Online Transaction Platform,the Filing Certificate forBusiness of Category II Medical Devices,the Registration Certificate for Medical Devices,the Food Business License,the Medicine Business License,the Filing Certificate for the Online Publication Trans
113、action Platform,the Internet Domain Name Services License,the Medical Device OperationLicense,the Medical Device Production License,the Filing Certificate for Third-Party Platform Provider of Online Trading Service for Medical Device,the Practice License of Medical Institutions,the Internet Religiou
114、s Information Service License,the Filing Certificate of Artworks Operators,the FilingInformation Form of Third Party Platform Providers of Online Food Trading,the Aquatic Wildlife Operation and Utilization License and certain permitsfor road testing and demonstration application of autonomous drivin
115、g vehicles.Given the uncertainties of interpretation and implementation of relevantlaws and regulations and the enforcement practice by relevant government authorities,we may be required to obtain additional licenses,permits,filingsor approvals for the functions and services of our platform in the f
116、uture.For more detailed information,see“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business in ChinaWe may be adversely affected by the complexity,uncertainties and changes in the regulations of internetand related business and companies in mainland China.”Furthermore,in connection w
117、ith our historical issuance of securities to foreign investors,we,our mainland China subsidiaries and the variableinterest entities,(i)are not required to obtain permissions from the China Securities Regulatory Commission,or the CSRC,(ii)are not required to gothrough cybersecurity review by the Cybe
118、rspace Administration of China,or the CAC,and(iii)have not been asked to obtain such permissions by anyPRC government authority.However,the PRC government has promulgated certain regulations and rules to exert more oversight and control over offerings that are conductedoverseas and/or foreign invest
119、ment in China-based issuers.On February 17,2023,the CSRC released the Trial Administrative Measures of OverseasSecurities Offering and Listing by Domestic Companies and five supporting guidelines,or,collectively,the Filing Rules,which will take effect onMarch 31,2023.According to the Filing Rules,do
120、mestic companies in mainland China that directly or indirectly offer or list their securities in anoverseas market are required to file with the CSRC.In addition,an overseas listed company must also submit the filing with respect to its follow-onofferings,issuance of convertible corporate bonds and
121、exchangeable bonds,and other equivalent offering activities,within a specific time framerequested under the Filing Rules.Therefore,we will be required to file with the CSRC for our overseas offering of equity and equity linked securities inthe future within the applicable scope of the Filing Rules.F
122、or more detailed information,see“Item 3.D.Key InformationRisk FactorsRisks Relatedto Doing Business in ChinaThe approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with ouroffshore offerings under the laws of mainland China,and,if required,we can
123、not predict whether or for how long we will be able to obtain such approvalor complete such filing.”Cash Flows through Our OrganizationBaidu,Inc.is a holding company with no operations of its own.We conduct our operations in mainland China primarily through our subsidiariesand the variable interest
124、entities in mainland China.As a result,although other means are available for us to obtain financing at the holding companylevel,Baidu,Inc.s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our mainlandChina subsidiaries and license
125、and service fees paid by the variable interest entities.If any of our subsidiaries incurs debt on its own behalf,theinstruments governing such debt may restrict its ability to pay dividends to Baidu,Inc.In addition,our mainland China subsidiaries are permitted to paydividends to Baidu,Inc.only out o
126、f their retained earnings,if any,as determined in accordance with PRC accounting standards and regulations.Further,our mainland China subsidiaries and the variable interest entities are required to make 7Table of Contentsappropriations to certain statutory reserve funds or may make appropriations to
127、 certain discretionary funds,which are not distributable as cash dividendsexcept in the event of a solvent liquidation of the companies.For more details,see“Item 5.B.Operating and Financial Review and ProspectsLiquidityand Capital ResourcesHolding Company Structure.”Under the laws and regulations of
128、 mainland China,our mainland China subsidiaries and the variable interest entities are subject to certainrestrictions with respect to paying dividends or otherwise transferring any of their net assets to us.Remittance of dividends by a wholly foreign-ownedenterprise out of mainland China is also sub
129、ject to examination by the banks designated by State Administration of Foreign Exchange,or SAFE.Theamounts restricted include the paid-up capital and the statutory reserve funds of our mainland China subsidiaries and the net assets of the variableinterest entities in which we have no legal ownership
130、,totaling RMB45.0 billion,RMB45.9 billion and RMB47.3 billion(US$6.9 billion)as ofDecember 31,2020,2021 and 2022,respectively.For risks relating to the fund flows of our operations in mainland China,see“Item 3.D.KeyInformationRisk FactorsRisks Related to Doing Business in ChinaOur subsidiaries and t
131、he variable interest entities in mainland China aresubject to restrictions on paying dividends and making other payments to our holding company.”From 2020 to 2022,certain of our mainland China subsidiaries have declared and distributed profits earned to Baidu(Hong Kong)Limited for anaggregate amount
132、 of RMB20.0 billion(US$2.9 billion);the dividend payments are subject to withholding tax.We have made tax provisions based onthe corresponding tax rate.If our mainland China subsidiaries further declare and distribute profits earned after January 1,2008 in the future,thedividend payments will be sub
133、ject to withholding tax,which will increase our tax liability and reduce the amount of cash available to our company.Forthe potential distributable profits to be distributed to our qualified Hong Kong incorporated subsidiary,the deferred tax liabilities are accrued at a 5%withholding tax rate.For mo
134、re information on related risks,please see“Item 3.D.Key InformationRisk FactorsRisks Related to Doing Business inChinaIf our mainland China subsidiaries declare and distribute dividends to their respective offshore parent companies,we will be required to paymore taxes,which could have a material and
135、 adverse effect on our result of operations.”Under the laws of mainland China,Baidu Inc.may provide funding to our mainland China subsidiaries only through capital contributions or loans,and to the variable interest entities only through loans,subject to satisfaction of applicable government registr
136、ation and approval requirements.For the years ended December 31,2020,2021 and 2022,Baidu,Inc.provided loans with principal amount of RMB10.0 billion,RMB14.5 billionand RMB11.0 billion(US$1.6 billion),respectively,to its subsidiaries,and the subsidiaries repaid principal amount of RMB15.4 billion,RMB
137、4.9 billionand RMB12.6 billion(US$1.8 billion),respectively,to Baidu,Inc.For the years ended December 31,2020,2021 and 2022,the subsidiaries of Baidu,Inc.provided loans with principal amount of RMB6.5 billion,RMB3.1 billion and RMB22.3 billion(US$3.2 billion),respectively,to Baidu,Inc.and Baidu,Inc.
138、repaid principal amount of RMB3.5 billion,RMB3.0 billion and RMB3.1 billion(US$449 million),respectively,to its subsidiaries.For the years ended December 31,2020,2021 and 2022,loans for the amounts of RMB602 million,RMB409 million and RMB65 million(US$9million),respectively,were provided to the nomi
139、nee shareholders to fund the capitalization of the variable interest entities for which the Company doesnot intend to seek repayment,and nil was repaid by the nominee shareholders.For the years ended December 31,2020,2021 and 2022,the variable interest entities received RMB5.0 billion,RMB6.9 billion
140、 andRMB5.4 billion(US$780 million),respectively,as capital contributions or loans from the subsidiaries of Baidu,Inc.and the variable interest entitiesrepaid principal amount of RMB1.1 billion,nil and RMB6.5 billion(US$940 million),respectively,to the subsidiaries.8Table of ContentsFor the years end
141、ed December 31,2020,2021 and 2022,the variable interest entities provided loans with principal amount of RMB261 million,RMB450 million and nil,respectively,to the subsidiaries of Baidu,Inc.and the subsidiaries repaid principal amount of RMB36 million,RMB10 millionand RMB200 million(US$29 million),re
142、spectively,to the variable interest entities.Baidu,Inc.has not declared or paid any cash dividends,nor does it has any present plan to pay any cash dividends on its ordinary shares in theforeseeable future.We currently intend to retain most,if not all,of our available funds and any future earnings t
143、o operate and expand our business.See“Item 8.Financial Information A.Consolidated Statements and Other Financial InformationDividend Policy.”For mainland China and UnitedStates federal income tax considerations of an investment in our ADSs,see“Item 10.Additional Information E.Taxation.”A.Selected Fi
144、nancial DataThe following table presents the selected consolidated financial information for our company.The selected consolidated statements ofcomprehensive income data and cash flow data for the three years ended December 31,2020,2021 and 2022 and the consolidated balance sheets data asof December
145、 31,2021 and 2022 have been derived from our audited consolidated financial statements,which are included in this annual reportbeginning on page F-1.The selected consolidated statements of comprehensive income data and cash flow data for the years ended December 31,2018and 2019 and the selected cons
146、olidated balance sheets data as of December 31,2018,2019 and 2020 have been derived from our audited consolidatedfinancial statements for the years ended December 31,2018,2019 and 2020,which are not included in this annual report.Our historical results do notnecessarily indicate results expected for
147、 any future periods.The selected consolidated financial data should be read in conjunction with,and arequalified in their entirety by reference to,our audited consolidated financial statements and related notes and“Item 5.Operating and Financial Reviewand Prospects”below.Our audited consolidated fin
148、ancial statements are prepared and presented in accordance with U.S.GAAP.Year Ended December 31,2018 2019 2020 2021 2022 RMB RMB RMB RMB RMB US$(In millions,except per share and per ADS data)Consolidated Statements of Comprehensive Income Data:Revenues:Online marketing services 81,912 78,093 72,840
149、80,695 74,711 10,832 Others 20,365 29,320 34,234 43,798 48,964 7,099 Total revenues 102,277 107,413 107,074 124,493 123,675 17,931 Operating costs and expenses:Cost of revenues 51,744 62,850 55,158 64,314 63,935 9,269 Selling,general and administrative 19,231 19,910 18,063 24,723 20,514 2,975 Resear
150、ch and development 15,772 18,346 19,513 24,938 23,315 3,380 Total operating costs and expenses 86,747 101,106 92,734 113,975 107,764 15,624 Operating profit 15,530 6,307 14,340 10,518 15,911 2,307 Total other income(loss),net 11,795 (6,647)8,750 260 (5,799)(841)Income(loss)before income taxes 27,325
151、 (340)23,090 10,778 10,112 1,466 Income taxes 4,743 1,948 4,064 3,187 2,578 374 Net income(loss)22,582 (2,288)19,026 7,591 7,534 1,092 Less:Net loss attributable to non-controlling interests (4,991)(4,345)(3,446)(2,635)(25)(4)Net income attributable to Baidu,Inc.27,573 2,057 22,472 10,226 7,559 1,09
152、6 9Table of Contents As of December 31,2018 2019 2020 2021 2022 RMB RMB RMB RMB RMB US$(In millions)Consolidated Balance Sheets Data:Cash and cash equivalents 27,638 33,443 35,782 36,850 53,156 7,707 Restricted cash 2,189 996 758 10,821 11,330 1,643 Short-term investments,net(1)111,626 112,924 126,4
153、02 143,243 120,839 17,520 Total assets(2)297,566 301,316 332,708 380,034 390,973 56,686 Short-term loans 3,046 2,618 3,016 4,168 5,343 775 Long-term loans,current portion 84 737 7,427 2 Long-term loans 7,456 7,804 12,629 13,722 1,990 Notes payable,current portion 6,871 5,219 10,505 6,904 1,001 Notes
154、 payable 42,735 38,090 48,408 43,120 39,893 5,784 Convertible senior notes,current portion(3)4,752 8,305 1,204 Convertible senior notes(3)4,712 12,297 11,927 12,652 9,568 1,387 Total liabilities 121,814 128,501 140,865 156,082 153,168 22,208 Total Baidu,Inc.shareholders equity 162,897 163,599 182,69
155、6 211,459 223,478 32,401 (1)We adopted Accounting Standards Update(“ASU”)No.2016-13,Financial Instruments-Credit Losses(Topic 326):Measurement of Credit Losses on FinancialInstruments(“ASU 2016-13”)on January 1,2020,which requires the measurement and recognition of expected credit losses for financi
156、al assets held at amortizedcost.ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology,which will result in more timely recognition of creditlosses.(2)We adopted ASU No.2016-02:Leases on January 1,2019 using the modified retrospective transition method.Rig
157、ht-of-use assets(“ROU assets”)and leaseliabilities(including current and non-current)for operating leases are presented on the face of the consolidated balance sheets as of December 31,2019,2020,2021 and 2022,while the consolidated balance sheet data as of December 31,2018 has been prepared in accor
158、dance with ASC Topic 840,Leases(“ASC 840”).(3)We adopted ASU No.2020-06,Accounting for Convertible Instruments and Contracts in an Entitys Own Equity(“ASU 2020-06”)on January 1,2022 using amodified retrospective transition method.Upon the adoption of ASU 2020-06,all of the proceeds received from the
159、 issuance of the existing notes should berecorded as a liability on the balance sheet in accordance with ASC 470-20.The difference between the principal amount of each of the existing notes and netproceeds from the issuance is considered debt discount and is amortized at their respective effective i
160、nterest rates to accrete the carrying value of the existing notesto its face value on the respective put dates of the existing notes.Year Ended December 31,2018 2019 2020 2021 2022 RMB RMB RMB RMB RMB US$(In millions)Consolidated Cash Flow Data:Net cash provided by operating activities 35,967 28,458
161、 24,200 20,122 26,170 3,794 Net cash used in investing activities (34,460)(19,974)(27,552)(31,444)(3,944)(572)Net cash provided by/(used in)financing activities 15,082 (3,873)5,665 23,396 (6,390)(926)Net increase in cash,cash equivalents and restricted cash 18,491 4,612 2,101 11,131 17,565 2,547 Fin
162、ancial Information Related to the Variable Interest EntitiesThe following tables present the condensed consolidating schedule of financial performance,financial position and cash flows for Baidu,Inc.,itswholly owned subsidiaries that are the Primary Beneficiaries of the VIEs under U.S.GAAP(the“Prima
163、ry Beneficiaries of VIEs excluding Baidu,Inc.”),its other subsidiaries that are not the Primary Beneficiaries of VIEs(the“Other Subsidiaries”),the VIEs and VIEs subsidiaries that weconsolidate for the periods and as of the dates presented.“Baidu Inc.”is our holding company in the Cayman Islands,and
164、the primary beneficiary of the VIEs including Beijing Baidu NetcomScience Technology Co.,Ltd.(“Baidu Netcom”)and Beijing Perusal 10Table of Contents Technology Co.,Ltd.(“Beijing Perusal”)and other VIEs.“Primary Beneficiaries of VIEs excluding Baidu,Inc.”mainly refer to iQIYI,Inc.,the primary benefic
165、iary of Beijing iQIYI Science&Technology Co.,Ltd.(“Beijing iQIYI”)and other iQIYI VIEs.“Other Subsidiaries”refer to the sum of non-VIE subsidiaries,which mainly include Baidu Online Network Technology(Beijing)Co.,Ltd.(“Baidu Online”),Baidu(China)Co.,Ltd.(“Baidu China”),B Times Technology(Beijing)Co.
166、,Ltd.(“Baidu Times”),BeijingQIYI Century Science&Technology Co.,Ltd(“Beijing QIYI Century”,a wholly-owned foreign enterprise of iQIYI,Inc.),and otherwholly-owned subsidiaries,which mainly provide online marketing services to external customers.In addition,as instructed by theprimary beneficiaries of
167、 the VIEs,certain wholly-owned subsidiaries including Baidu Online and Beijing QIYI Century also provide long-term loans to the nominee shareholders of the VIEs to fund the capitalization of these entities as well as exclusive technology consultingand services to the VIEs.“VIEs and VIEs subsidiaries
168、”refer to the sum of Baidu Netcom,Beijing Perusal,Beijing iQIYI and other iQIYI VIEs,and other VIEs.Selected Condensed Consolidating Statements of Comprehensive Income Information For the Year Ended December 31,2022 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs
169、and VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Revenues 14 82,471 62,121 (20,931)123,675 Share of income(loss)of the VIEs and VIEs subsidiaries 158 164 (322)Net income(loss)7,559 (272)11,640 212 (11,605)7,534 For the Year Ended December 31,2021 Baidu,Inc.Primary Beneficiaries
170、 of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Revenues 4 83,424 61,380 (20,315)124,493 Share of(loss)income of the VIEs and VIEs subsidiaries (276)(2,067)2,343 Net income(loss)10,226 (6,248)16,330 (220)(12,497)7,591 For th
171、e Year Ended December 31,2020 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Revenues 69,425 52,666 (15,017)107,074 Share of income(loss)of the VIEs and VIEs subsidiaries 2,483 (1,045)(1,438)N
172、et income(loss)22,472 (7,055)26,137 2,091 (24,619)19,026 11Table of ContentsSelected Condensed Consolidating Balance Sheets Information As of December 31,2022 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolidated Total RMB
173、 (In millions)Assets Cash and cash equivalents 18,691 4,351 26,333 3,781 53,156 Short-term investments 5,485 110,704 4,650 120,839 Accounts receivable,net 3,325 8,408 11,733 Others 48 18,587 8,487 27,122 Total current assets 24,176 4,399 158,949 25,326 212,850 Fixed assets,net 225 16,124 7,624 23,97
174、3 Intangible assets,net 45 1,209 1,254 Licensed copyrights,net 4,889 1,952 6,841 Produced content,net 468 12,534 13,002 Long-term investments,net 365 36,775 18,157 55,297 Long-term time deposits and held-to-maturity investments 23,329 300 23,629 Investments in subsidiaries 274,483 243 (274,726)Contr
175、actual interests in the VIEs and VIEs subsidiaries(1)884 23,778 (24,662)Operating lease right-of-use assets 4,905 5,460 10,365 Others 152 32,781 10,829 43,762 Total non-current assets 275,592 760 143,094 58,065 (299,388)178,123 Amounts due from the entities within Baidu(2)22,648 3,206 (25,854)Total
176、assets 299,768 27,807 305,249 83,391 (325,242)390,973 Liabilities Accounts payable and accrued liabilities 616 167 21,482 15,749 38,014 Customers deposits and deferred revenue 5,729 7,387 13,116 Operating lease liabilities 255 2,554 2,809 Others 6,904 8,305 5,804 4,678 25,691 Total current liabiliti
177、es 7,520 8,472 33,270 30,368 79,630 Operating lease liabilities 245 4,565 4,810 Others 53,614 9,568 3,448 2,098 68,728 Total non-current liabilities 53,614 9,568 3,693 6,663 73,538 Amounts due to the entities within Baidu(2)15,156 18,743 (33,899)Total liabilities 76,290 18,040 36,963 55,774 (33,899)
178、153,168 Redeemable noncontrolling interests 5,604 2,678 111 8,393 Equity Total Baidu shareholders equity(3)223,478 1,041 265,640 24,662 (291,343)223,478 Noncontrolling interests 3,122 (32)2,844 5,934 Total equity 223,478 4,163 265,608 27,506 (291,343)229,412 Total liabilities,redeemable noncontrolli
179、ng interests,andequity 299,768 27,807 305,249 83,391 (325,242)390,973 12Table of Contents As of December 31,2021 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Assets Cash and cash equivalents
180、 11,448 1,673 20,850 2,879 36,850 Short-term investments 6,499 2 133,756 2,986 143,243 Accounts receivable,net 2,491 7,490 9,981 Others 61 50 15,056 8,074 23,241 Total current assets 18,008 1,725 172,153 21,429 213,315 Fixed assets,net 199 13,923 8,905 23,027 Intangible assets,net 1 74 1,614 1,689 L
181、icensed copyrights,net 4,969 2,289 7,258 Produced content,net 525 10,426 10,951 Long-term investments,net 374 36,046 22,998 59,418 Long-term time deposits and held-to-maturity investments 7,914 7,914 Investments in subsidiaries 251,929 106 (252,035)Contractual interests in the VIEs and VIEs subsidia
182、ries(1)2,117 24,095 (26,212)Operating lease right-of-use assets 4,989 7,076 12,065 Others 152 33,548 10,697 44,397 Total non-current assets 254,245 527 126,083 64,111 (278,247)166,719 Amounts due from the entities within Baidu(2)6,116 18,751 3,269 (28,136)Total assets 278,369 21,003 301,505 85,540 (
183、306,383)380,034 Liabilities Accounts payable and accrued liabilities 712 71 22,249 18,352 41,384 Customers deposits and deferred revenue 7,656 6,050 13,706 Operating lease liabilities 243 2,619 2,862 Others 10,450 2,515 3,571 16,536 Total current liabilities 11,162 71 32,663 30,592 74,488 Operating
184、lease liabilities 316 5,253 5,569 Others 55,748 12,655 6,589 1,033 76,025 Total non-current liabilities 55,748 12,655 6,905 6,286 81,594 Amounts due to the entities within Baidu(2)19,744 (19,744)Total liabilities 66,910 12,726 39,568 56,622 (19,744)156,082 Redeemable noncontrolling interests 4,912 1
185、,580 656 7,148 Equity Total Baidu shareholders equity(3)211,459 850 259,577 26,212 (286,639)211,459 Noncontrolling interests 2,515 780 2,050 5,345 Total equity 211,459 3,365 260,357 28,262 (286,639)216,804 Total liabilities,redeemable noncontrolling interests,andequity 278,369 21,003 301,505 85,540
186、(306,383)380,034 13Table of Contents Note:(1)It represents the elimination of the contractual interests in the VIEs and VIEs subsidiaries,which includes contractual interests in the VIEs through loans tonominee shareholders or capital contributions and the primary beneficiaries share of income(loss)
187、from the VIEs and VIEs subsidiaries.(2)It represents the elimination of intercompany balances among Baidu,Inc.,the primary beneficiaries,other subsidiaries and the VIEs and VIEs subsidiaries.Theshort-term loans and long-term loans provided to the VIEs and VIEs subsidiaries were RMB8.8 billion(US$1.3
188、 billion)and RMB8.1 billion(US$1.2 billion),respectively,as of December 31,2022 and RMB7.4 billion and RMB10.6 billion,respectively,as of December 31,2021.(3)The loans provided to the nominee shareholders were RMB19.1 billion(US$2.8 billion)and RMB19.4 billion as of December 31,2022 and 2021,respect
189、ively,which will mature from 2027 to 2047.The loans provided to the nominee shareholders were to fund the capitalization of the VIEs for which the Company does notintend to seek repayment.The term of all such loans provided to the nominee shareholders has historically been extended prior to their re
190、spective original maturitydates,and we will continue to extend the term of all outstanding loans before they become due.Selected Condensed Consolidating Cash Flows Information For the Year Ended December 31,2022 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and
191、VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Net cash(used in)/provided by operating activities (2,418)(161)25,664 2,938 147 26,170 Net cash provided by/(used in)investing activities 2,753 (2,773)(21,268)(1,898)19,242 (3,944)Including:Cash contribution to VIEs and VIEssubsidiar
192、ies(1)(2)(65)65 Loans provided to VIEs and VIEs subsidiaries(3)(5,313)5,313 Loans repayments from VIEs and VIEssubsidiaries(3)6,480 (6,480)Net cash provided by/(used in)financing activities 6,054 5,580 795 (64)(19,389)(7,024)Including:Cash contribution to VIEs and VIEssubsidiaries(1)(2)65 (65)Loans
193、provided to VIEs and VIEs subsidiaries(3)5,313 (5,313)Loans repayments from VIEs and VIEssubsidiaries(3)(6,480)6,480 14Table of Contents For the Year Ended December 31,2021 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolid
194、ated Total RMB (In millions)Net cash(used in)/provided by operating activities (1,853)(371)18,080 4,121 145 20,122 Net cash(used in)/provided by investing activities (16,183)(3,564)(25,522)(7,551)21,376 (31,444)Including:Cash contribution to VIEs and VIEssubsidiaries(1)(2)(1,408)1,408 Loans provided
195、 to VIEs and VIEs subsidiaries(3)(5,520)5,520 Net cash provided by/(used in)financing activities 25,628 (272)15,562 3,999 (21,521)23,396 Including:Cash contribution to VIEs and VIEssubsidiaries(1)(2)1,408 (1,408)Loans provided to VIEs and VIEs subsidiaries(3)5,520 (5,520)For the Year Ended December
196、31,2020 Baidu,Inc.Primary Beneficiaries of VIEs excluding Baidu,Inc.Other Subsidiaries VIEs and VIEs subsidiaries Eliminations Consolidated Total RMB (In millions)Net cash(used in)/provided by operating activities (1,912)(295)21,643 4,616 148 24,200 Net cash provided by/(used in)investing activities
197、 5,921 (7,284)(27,557)(8,382)9,750 (27,552)Including:Cash contribution to VIEs and VIEssubsidiaries(1)(2)(3,502)3,502 Loans provided to VIEs and VIEs subsidiaries(3)(1,507)1,507 Loans repayments from VIEs and VIEssubsidiaries(3)1,136 (1,136)Net cash(used in)/provided by financing activities (1,757)1
198、0,895 2,566 3,859 (9,898)5,665 Including:Cash contribution to VIEs and VIEssubsidiaries(1)(2)3,502 (3,502)Loans provided to VIEs and VIEs subsidiaries(3)1,507 (1,507)Loans repayments from VIEs and VIEssubsidiaries(3)(1,136)1,136 15Table of Contents Note:(1)For the years ended December 31,2020,2021 a
199、nd 2022,the primary beneficiaries designated its subsidiaries to provide loans totaling RMB602 million,RMB409 million and RMB65 million(US$9 million),respectively,to the nominee shareholders to fund the capitalization of the VIEs and VIEs subsidiaries forwhich the primary beneficiaries do not intend
200、 to seek repayment,and nil was repaid by the nominee shareholders.(2)For the years ended December 31,2020,2021 and 2022,the VIEs and VIEs subsidiaries received RMB2.9 billion,RMB1.0 billion and nil,respectively,as capitalcontribution from other subsidiaries.(3)For the years ended December 31,2020,20
201、21 and 2022,the VIEs and VIEs subsidiaries received RMB1.5 billion,RMB5.5 billion and RMB5.3 billion(US$770million),respectively,as loans from other subsidiaries and the VIEs and VIEs subsidiaries repaid principal amounts of RMB1.1 billion,nil and RMB6.5 billion(US$940 million),respectively,to other
202、 subsidiaries.B.Capitalization and IndebtednessNot applicable.C.Reasons for the Offer and Use of ProceedsNot applicable.D.Risk FactorsSummary of Risk FactorsAn investment in our ADSs or Class A ordinary shares involves significant risks.Below is a summary of material risks we face,organized underrel
203、evant headings.All the operational risks associated with being based in and having operations in mainland China also apply to operations in HongKong.With respect to the legal risks associated with being based in and having operations in mainland China,the laws,regulations and the discretion ofmainla
204、nd China governmental authorities discussed in this annual report are expected to apply to mainland China entities and businesses,rather thanentities or businesses in Hong Kong which operate under a different set of laws from mainland China.These risks are discussed more fully in Item 3.D.Key Inform
205、ationRisk Factors.Risks Related to Our Business and Industry If we fail to retain existing customers or attract new customers for our online marketing services,our business,results of operations andgrowth prospects could be seriously harmed;Our business and results of operations could continue to be
206、 materially and adversely affected by the challenging macroeconomicenvironment impacting online marketing demand;Our business depends on a strong brand,and if we are unable to maintain and enhance our brand,our business and results of operationsmay be harmed;We face risks associated with our propose
207、d acquisition of YY Live and its online live streaming business;We face significant competition and may suffer from loss of users and customers as a result;If our expansions into new businesses are not successful,our results of operation and growth prospects may be materially and adverselyaffected;W
208、e have experienced slowdowns and declines in our revenues,and we may sustain net loss from time to time,and we may experiencedownward pressure on our operating and profit margins in the future;Our business is subject to complex and evolving Chinese and international laws and regulations,including th
209、ose regarding data privacyand cybersecurity.Failure to comply with these laws and 16Table of Contents regulations would result in claims,penalties,damages to our reputation and brand,or declines in user growth or engagement,or otherwiseharm our business;and We have been and may again be subject to l
210、egal proceedings,claims and investigations and could be adversely impacted by unfavorableresults of legal proceedings and investigations.Risks Related to Our Corporate Structure Our company is a Cayman Islands holding company with no equity ownership in the variable interest entities and we conduct
211、ouroperations in mainland China through(i)our mainland China subsidiaries and(ii)the variable interest entities with which we havemaintained contractual arrangements.Investors in our Class A ordinary shares or the ADSs thus are not purchasing equity interest in thevariable interest entities in mainl
212、and China but instead are purchasing equity interest in a Cayman Islands holding company.If the PRCgovernment deems that our contractual arrangements with the variable interest entities do not comply with mainland Chinas regulatoryrestrictions on foreign investment in the relevant industries,or if t
213、hese regulations or the interpretation of existing regulations change or areinterpreted differently in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.Ourholding company in the Cayman Islands,the variable interest entities,and investors
214、 of our company face uncertainty about potential futureactions by the PRC government that could affect the enforceability of the contractual arrangements with the variable interest entities and,consequently,significantly affect the financial performance of the variable interest entities and our comp
215、any as a group;Our contractual arrangements with the variable interest entities in mainland China and the individual nominee shareholders may not be aseffective in providing control over these entities as direct ownership;and We are in the process of registering the pledges of equity interests by no
216、minee shareholders of some of the variable interest entities,and wemay not be able to enforce the equity pledges against any third parties who acquire the equity interests in good faith in the relevant variableinterest entities before the pledges are registered.Risks Related to Doing Business in Chi
217、na Changes in Chinas economic,political or social conditions or government policies could have a material and adverse effect on ourbusiness and operations;The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshoreofferings under th
218、e laws of mainland China,and,if required,we cannot predict whether or for how long we will be able to obtain suchapproval or complete such filing;Uncertainties with respect to the PRC legal system could adversely affect us;We may be adversely affected by the complexity,uncertainties and changes in t
219、he regulations of internet and related business andcompanies in mainland China;Failure to meet the PRC governments complex regulatory requirements on our business operation could have a material adverse effect onour operations and the value of our securities;Any failure or perceived failure by us to
220、 comply with the enacted Anti-Monopoly Guidelines for Internet Platforms and other anti-monopoly laws and regulations may result in governmental investigations or enforcement actions,litigation or claims against us and couldhave an adverse effect on our business,financial condition and results of op
221、erations;It may be difficult for overseas regulators to conduct investigation or collect evidence within mainland China;17Table of Contents The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements andthe inability of the PCA
222、OB to conduct inspections of our auditor in the past has deprived our investors with the benefits of suchinspections;and Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect orinvestigate completely auditors located in China.The
223、 delisting or prohibition of trading of the ADSs,or the threat of their being delisted orprohibited from trading,may materially and adversely affect the value of your investment.Risks Related to our ADSs and Class A Ordinary Shares The trading price of our ADSs and/or our Class A ordinary shares has
224、 been and is likely to continue to be volatile regardless of ouroperating performance;We adopt different practices as to certain matters as compared with many other companies primarily listed on the Hong Kong StockExchange;Substantial future sales or perceived potential sales of our Class A ordinary
225、 shares and/or ADSs in the public market could cause the priceof our Class A ordinary shares and/or ADSs to decline;and The different characteristics of the capital markets in Hong Kong and the U.S.may negatively affect the trading prices of our Class Aordinary shares and/or ADSs.Risks Related to Ou
226、r Business and IndustryIf we fail to retain existing customers or attract new customers for our online marketing services,our business,results of operations and growthprospects could be seriously harmed.We generate a substantial majority of our revenues from online marketing services.Our online mark
227、eting customers will not continue to dobusiness with us if their investment does not generate sales leads and ultimately consumers,or if we do not deliver their web pages in an appropriate andeffective manner.Our online marketing customers may choose to discontinue their business with us,which are n
228、ot subject to fixed-term contracts.Inaddition,third parties may develop and use certain technologies to block the display of our customers advertisements and other marketing products onour Baidu platform,which may in turn cause us to lose customers and adversely affect our results of operations.Furt
229、hermore,as our auction-based P4Pservices enable our customers to bid for priority placement of their paid sponsored links,we may lose customers if they find the bidding mechanism notcost effective or otherwise not attractive.Additionally,if our users do not increase their engagement on our platform,
230、or our content ecosystem fails tooffer rich and quality content that meets users tastes and preferences,or our users spend more time with or otherwise satisfy their content consumptiondemands on competing platforms,or we otherwise experience user traffic decline due to any reason,it would be difficu
231、lt for us to attract new customersor retain existing customers.If our customers determine that their expenditures on our platform do not generate expected returns,they may allocate aportion or all of their advertising budgets to other advertising channels,such as other online marketing platforms,tel
232、evision and outdoor media,andreduce or discontinue business with us.Failure to retain our existing customers or attract new customers for our online marketing services couldseriously harm our business,results of operations and growth prospects.We have recorded substantial customer deposits and defer
233、red revenue,whichmainly consist of deposits received from certain customers of our online marketing services.If we are unable to fulfill our obligation in respect of suchcustomer deposits and deferred revenue,we may have to refund the balance to our customers and our cash flow and liquidity position
234、 would bematerially adversely affected.Since most of our customers are not bound by long-term contracts,they may amend or terminate advertising arrangements with us.Failure toretain existing customers or attract new ones to advertise on our platform may materially and adversely affect our business,f
235、inancial condition,resultsof operations and prospects.We have in the past removed,and may in the future again remove,questionable listings or advertisements to ensure the quality and reliability ofour search results and/or information feed.Such removal,whether temporary 18Table of Contentsor permane
236、nt,may cause affected customers to discontinue their business with us or negatively impact our relationships with affected Baidu Unionpartners.We also examine the relevant business licenses and bank accounts of prospective customers prior to business engagement,as a quality controlmeasure.In additio
237、n,we have taken steps to implement measures requested by PRC regulatory authorities,such as modifying paid search practices andlimiting the displays of advertisements in connection with certain industries.We have also proactively implemented numerous additional measures todeliver a better user exper
238、ience and build a safer and more trustworthy platform for users.Such measures have had a negative impact on the number ofcustomers and our revenues,although we believe such impact is likely to be temporary.Regulations on online marketing services in mainland China areevolving,and uncertainties remai
239、n with respect to the implementation of and compliance with new regulations that may emerge,which in turn may havea material adverse impact on our business,results of operations and growth prospects.Our business and results of operations could continue to be materially and adversely affected by the
240、challenging macroeconomic environmentimpacting online marketing demand.Online marketing services continue to be a primary source of our revenues and declined in 2022,mainly due to the weakness in online advertisingdemand as our customers face challenging macroeconomic environment in their respective
241、 industries and in the general economy,including thesignificant adverse impact of the COVID-19 pandemic.Our business and results of operations could continue to be materially and adversely affected bythe challenging macroeconomic environment and the general growth in online marketing through interne
242、t search or feed.While the internet hasdeveloped to a more advanced stage in China,customers have many channels to conduct online marketing and promotions.As users may not spend asmuch time on search-plus-newsfeed as they do on other types of internet platforms,many current and potential customers m
243、ay not allocate as much oftheir marketing budgets to online marketing through search-plus-newsfeed,as compared to other methods of online marketing.Our ability to increaserevenue and profitability from online marketing may be adversely impacted by a number of factors,many of which are beyond our con
244、trol,includingbut not limited to:difficulties associated with developing and maintaining a larger user base with demographic characteristics attractive to online marketingcustomers and maintaining and increasing user engagement;increased competition and potential re-allocation of marketing budgets a
245、nd downward pressure on online marketing prices,for example,resulting from an oversupply of advertising inventory released into the market;higher customer acquisition costs due in part to the limited experience of small to medium-sized enterprises,or SMEs,with the internet asa marketing channel or d
246、ue to competition;decreased use of our search and paid click because search queries are increasingly being undertaken via voice-activated smart devices,apps,social media or other online platforms;ineffectiveness of our online marketing delivery,tracking and reporting systems;decreased use of interne
247、t or online marketing in China;and tightened regulatory environment in mainland Chinas internet and mobile internet space.Our business depends on a strong brand,and if we are unable to maintain and enhance our brand,our business and results of operations may beharmed.We believe that our brand“Baidu”
248、has contributed significantly to the success of our business.We also believe that maintaining and enhancing the“Baidu”brand is critical to increasing the number of our users,customers,Baidu Union partners and content providers,as well as to expanding ourdeveloper communities and to attracting and re
249、taining enterprise and public sector customers and partners.We have conducted various marketing andbrand promotion activities,but we cannot assure you that these activities will achieve the brand promotion effect expected by us.If we fail to maintainand further promote the“Baidu”brand,or if we incur
250、 excessive expenses in this effort,our business and results of operations may be materially andadversely affected.19Table of ContentsIn addition,any negative publicity about us,our products and services,our employees,our business practices,our search results or the platform towhich our search result
251、s link,regardless of its veracity,could harm our brand image and in turn adversely affect our business and results of operations.We cannot assure you that we will be able to defuse negative publicity to the satisfaction of our investors,users,customers and business partners.Fromtime to time,there ha
252、s been negative publicity about us,our brand image,our value proposition and our business practice,which has adversely affectedour public image and reputation during certain periods of intense negative publicity.Moreover,our platform and services by nature may from time totime be related to,or perce
253、ived to be related to,certain controversial public events or discussion,leading to public criticism against us.The negativepublicity surrounding similar incidents have resulted in significant adverse impact on our public image and reputation.Intense negative publicity maydivert our managements atten
254、tion and may adversely impact our business.We cannot assure you that our brand,public image and reputation will not bematerially and adversely affected in the future.We face risks associated with our proposed acquisition of YY Live and its online live streaming business.Baidu(Hong Kong)Limited,our w
255、holly-owned subsidiary,entered into definitive agreements with JOYY Inc.and certain of its affiliates,whichare collectively referred to as JOYY,to acquire JOYYs domestic video-based entertainment live streaming business in China(“YY Live”)onNovember 16,2020,and subsequently amended the share purchas
256、e agreement on February 7,2021.The closing of this acquisition is subject to certainconditions,including,among others,obtaining necessary regulatory approvals from governmental authorities.The share purchase agreement is subjectto termination if the closing does not occur by the long stop date,and w
257、e and JOYY have agreed to extend the long stop date indefinitely until theextension is terminated by either party.We have paid an aggregate of US$1.9 billion,after considering working capital adjustment of US$0.1 billion,toJOYY and its designated escrow account,and deposited an aggregate of US$1.6 b
258、illion into several escrow accounts,in accordance with the terms andschedule set forth in the share purchase agreement.Despite good faith efforts,we have not obtained necessary regulatory approvals with respect to theproposed acquisition as of the date of this annual report.There can be no assurance
259、 that the relevant regulatory approvals will be obtained or theacquisition of YY Live will be closed.In the event the acquisition is not closed,we will not be able to achieve the intended objectives,benefits oropportunities associated thereto,despite the significant diversion of resources and manage
260、ment attention to date,and we may also suffer from materialadverse impact on our business,prospects,reputation,liquidity,financial results and face disputes or other proceedings.On November 18,2020,Muddy Waters issued a short seller report containing certain allegations against JOYY,including YY Liv
261、e business.Based on public records,in November 2020,JOYY and certain of its current and former officers and directors were named as defendants in a federalputative securities class action alleging that they made material misstatements and omissions in documents filed with the SEC regarding certain o
262、f theallegations contained in the Muddy Waters short seller report.On February 8,2021,JOYY publicly disclosed that its audit committee conducted anindependent review of the allegations raised in the report related to the YY Live business,with the assistance of independent counsel,working with ateam
263、of experienced forensic auditors and data analytics experts,and that the review concluded that the allegations raised and conclusions reached in thereport about the YY Live business were not substantiated.In March 2022,the court granted defendants motion to dismiss in its entirety with prejudice.On
264、April 8,2022,the co-lead plaintiffs filed a notice of appeal.JOYY cannot reasonably estimate a potential future loss at this stage.We are unable topredict any further consequence that may arise from or relate in any way to the allegations contained in the Muddy Waters short seller report.Theremight
265、be other class actions or regulatory enforcement actions in connection with such allegations.Any adverse outcome as a result of the short sellerreport,or any class action or regulatory enforcement action in connection thereof,could have a material adverse effect on YY Lives business,financialconditi
266、on,results of operation,cash flows,and reputation,and we may record impairment charges of intangible assets and goodwill in connection withthe acquisition,if closed,in the future.Although the allegations against JOYY have been proven to be groundless,we had already allocated a portion ofour resource
267、s to make assessment in relation to the short seller report and various matters provided for in the share purchase agreement.In the event thatthere is a dispute as to whether indemnification provision is triggered,we may need to utilize a 20Table of Contentssignificant portion of our resources and d
268、ivert managements attention from our day-to-day operations to resolve such disputes,including any litigationor other legal proceedings arising thereof.Even if the acquisition of YY Live is closed eventually,there can be no assurance that the acquisition will bring the anticipated benefits andopportu
269、nities to us.We have relatively limited experience with operating the online live streaming business and we may not be able to successfullyintegrate YY Live into our existing business.We face uncertainties and challenges in navigating the complex regulatory environment,competingeffectively in attrac
270、ting and retaining users and hosts,and developing and/or upgrading products and services as well as technologies to meeteverchanging user needs.If implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors,we maynot realize the full anticipated ben
271、efits of the acquisition of YY Live.Our failure to meet the challenges involved in realizing the anticipated benefits ofthe acquisition of YY Live could cause an interruption of,or a loss of momentum in,our activities and could adversely affect our results of operations.The acquisition and integrati
272、on of the businesses may result in material unanticipated problems,expenses,liabilities,competitive responses anddiversion of managements attention,and we may record impairment charges in connection therewith if the anticipated benefits of the acquisition fail torealize.We would be subject to and ma
273、y not be able to successfully manage a variety of additional risks associated with combining YY Live with us.These risks include,but are not limited to,the following:the online live streaming business is based on a relatively new business model in a relatively new market in which user demand maychan
274、ge or decrease substantially;challenges in the integration of operations and systems and in managing the expanded operations of a larger and more complex company;challenges in achieving anticipated business opportunities and growth prospects from combining YY Live with the rest of our businesses;rul
275、es and measures governing online live streaming businesses and hosts,both in and outside of mainland China,are complex andevolving,and we may not be able to navigate such complex regulatory environment or to respond to future changes in regulatoryenvironment in an effective and timely manner;we may
276、face significant risks related to the content and communications on YY Live,as a majority of the communications on YY Live areconducted in real time,and we are unable to verify the sources of all information posted thereon or examine the content generated by usersbefore it is posted;the revenue mode
277、l for online live streaming may not remain effective,and we may not be able to retain existing users,attract new users,keep users engaged and attract more paying users;we may not be able to retain or attract popular talents such as performers,channel managers,professional game players,commentators a
278、ndhosts for our live streaming platform or these talents may fail to draw fans or participants;and unanticipated additional costs and expenses resulting from integrating into our business additional personnel,operations,products,services,technology,internal controls and financial reporting responsib
279、ilities.In addition,on March 12,2022,the National Development and Reform Commission,or the NDRC,and the Ministry of Commerce,or the MOC,issued the Negative List for Market Access(2022 Version),which,among others,prohibits non-state capital from engaging in live streaming andbroadcasting of events an
280、d activities involving politics,economy,military affairs,diplomatic affairs,major social events,culture,science andtechnology,public health,education and sports and such other activities and events related to political direction,public opinion orientation and valueorientation.The scope of these rest
281、ricted subject matters for live streaming and broadcasting is relatively broad and vague,and is subject to furtherclarifications and interpretations by the regulator.Even if we were able to close the acquisition of YY Live eventually,we may need to further adjust thebusiness and operations of YY Liv
282、e,which may be adversely affected.21Table of ContentsWe face significant competition and may suffer from loss of users and customers as a result.We face significant competition in almost every aspect of our business.For Baidu Core business,our primary competitors are mainly internetcompanies,online
283、marketing platforms in China and other search engines.We compete with these entities for both users and customers on the basis ofuser traffic,cyber security quality(relevance)of search(and other marketing and advertising)results,availability and user experience products andservices,distribution chan
284、nels and the number of associated third-party websites.iQIYI competes with other internet media and entertainment services,such as internet and social platforms and short-form video platforms,as well as major TV stations.iQIYI competes with these market players for bothusers and advertising customer
285、s,and primarily on the basis of obtaining IP rights to popular content,conducting brand promotions and other marketingactivities,and making investments in and acquisitions of business partners.See“Item 4.B.Information on the CompanyBusiness OverviewCompetition.”Some of our competitors have significa
286、nt financial resources,long operating histories and are experienced in attracting and retaining theirusers,accommodating their users habits and preferences and managing customers.They may use their experience and resources to compete with us in avariety of ways,including competing for users and thei
287、r time,customers,third-party agents,content,strategic partners and networks of third-partywebsites/wapsites,investing more heavily in research and development and making investments and acquisitions.Our business environment is rapidlyevolving and competitive.Our business faces changing technologies,
288、shifting user needs,and frequent introductions of rival products and services.Some of our competitors in the search sector may have innovative business models,extensive distribution network or proprietary content ortechnologies that may provide users with better user experience and customers with be
289、tter services.They may use their resources in ways that couldaffect our competitive position,including developing new products,making acquisitions,continuing to invest heavily in research and development andin talent,and continuing to compete aggressively for users,advertisers,customers,the acquisit
290、ion of traffic and content.If any of our competitorsprovides comparable or better Chinese language search and feed experience or internet video services,our user traffic could decline significantly.Additionally,if the channels and properties that we use to distribute services or products to our user
291、s and customers are no longer available to us,wemay experience a decline in user traffic.Any such decline in traffic could weaken our brand and result in loss of users and customers,which could havea material and adverse effect on our results of operations.There are vertical service providers in the
292、 forms of mobile apps and/or websites that allow users to search within their closed ecosystems.Theseplayers often purchase traffic from search engines and try to retain their users by offering comprehensive services on their platforms.As these verticalservice providers expand,though they will conti
293、nue to acquire traffic from search engines,their reliance on search engines may decline,especially ifthey can consolidate their industry verticals.We also face competition from other types of advertising media,including traditional advertising media,such as newspapers,magazines,yellowpages,billboard
294、s,other forms of outdoor media,television and radio,mobile apps,webcasting and online video.Large companies in China generallyallocate,and may continue to allocate,a limited portion of their budgets to online marketing,as opposed to traditional advertising and other forms ofadvertising media.If thes
295、e companies do not devote a larger portion of their marketing budgets to online marketing services provided by us,or if ourexisting customers reduce the amount they spend on online marketing,our results of operations and growth prospects could be adversely affected.If our expansions into new busines
296、ses are not successful,our results of operation and growth prospects may be materially and adversely affected.As part of our growth strategy,we enter into new businesses from time to time to generate additional revenue streams and through ourdevelopment of new business lines or strategic investments
297、 in or acquisitions of other businesses.Expansions into new businesses may presentoperating,marketing and compliance challenges that differ from those that we currently encounter.22Table of ContentsWe have invested significant resources in the research and development of artificial intelligence(AI)t
298、echnology and have made significantprogress in the commercialization of AI-enabled offerings,including in-app services,cloud services and solutions,intelligent driving services andsolutions and smart devices and services.We plan to continue to invest capital and other resources into our AI-enabled b
299、usiness operations.However,AItechnology is rapidly evolving with significant uncertainties,and we cannot assure you that our investment and exploration in AI technology andAI-enabled products and services will be successful.Our operating results may also suffer if our innovation is not responsive to
300、 the needs of our users,customers and partners,inappropriately timed with market opportunities,or marketed ineffectively.For example,we have limited experience withoperating and scaling AI-enabled business,including cloud services and solutions,intelligent driving services and solutions and smart de
301、vices andservices,which could subject us to various challenges and risks,including developing and managing relationships with enterprises and public sectorcustomers and partners,who are likely to have different needs and preferences from our existing customers,users and partners,highly competitivepr
302、ocurement processes,instances of corrupt practices or other illegal gains,longer receivable payment cycles and lower collection rates.We also maynot alter our business practices in time to avoid or reduce adverse effects from any of the foregoing risks.In addition,our AI-enabled business requiresver
303、y different products and services,sales and marketing channels and internal operational systems and processes.These requirements could disrupt ourcurrent operations and harm our financial condition and operating results,especially during the initial stage of investment,development and scaling ofour
304、new AI-enabled offerings.We may also enter into other markets and industries/industry verticals that are new to us through organic business initiatives or investment andacquisitions,such as e-commerce,short-video,and healthcare vertical including internet hospital,which may subject us to different a
305、nd unforeseenrisks.However,we cannot assure you that such efforts will be successful.For these new markets and industries/industry verticals,we may not havesufficient experience and may not be able to navigate the rapidly evolving regulatory environment or forecast and meet the continually changingd
306、emands and preferences for products and services.Some of these new markets and industries/industry verticals are emerging with relatively novel anduntested business models.Any of the foregoing could pose significant challenges to us.We may not realize the anticipated benefits of our investments orac
307、quisitions,due to the uncertainties related to the performance and valuation of the relevant targets,or failure to integrate the targets into our existingbusiness,or difficulty in operating the acquired business with our existing expertise and resources.See also“Our strategy of investments andacquir
308、ing complementary businesses and assets may fail.”It is uncertain whether our strategies will attract users and customers or generate the revenue required to succeed.If we fail to generate sufficientusage of our new products and services,we may not grow revenue in line with the significant resources
309、 we invest in these new businesses.This maynegatively impact gross margins and operating income.Commercial success of our expansion into new business areas depends on many factors,including innovativeness,competitiveness,effectiveness of distribution and marketing,and pricing and investments strateg
310、ies,especially in the earlystage of competition for market share.For example,the smart transportation industry is highly competitive and fragmented.Our current and potentialcompetitors in this industry range from large and established technology companies to emerging start-ups.Some competitors have
311、longer operatinghistories in the sector.They can use their experience,resources and network in ways that could affect our competitive position,including makingacquisitions,continuing to invest heavily in research and development and in talents,aggressively initiating intellectual property claims(whe
312、ther or notmeritorious),and continuing to compete aggressively for customers,partners and investees.Our competitors may be able to innovate and provideproducts and services faster than we can or may foresee product-and-service needs before us.As a result,we may not achieve significant revenues fromo
313、ur new business areas,such as our AI-enabled business operations,for several years,or at all,and may incur significant losses during the process andfail to recoup our investments.On the other hand,market conditions and general acceptance of products and services could be adversely impacted ifother p
314、layers in the market fail to adopt appropriate business and operational model,develop and offer successful products and services and develop andadapt appropriate technologies and infrastructure.If the markets of our new businesses,such as intelligent driving and electric vehicle,do not 23Table of Co
315、ntentsdevelop and grow as we anticipate,we may incur significant loss from our new businesses and our growth prospects may be materially adverselyimpacted.In addition,we may encounter regulatory uncertainties related to new business areas that we enter into.The laws and regulations related to AItech
316、nology and products are at an early stage of development and still evolving in mainland China.The effects of such laws and regulations remainunclear and may add uncertainties to the development and operation of our AI-related business.For example,as mainland Chinas regulatory frameworkon autonomous
317、driving evolves,we may be required to comply with approval and other compliance requirements for autonomous driving road test,operation and commercialization,internet security and related data collection and sharing promulgated by PRC government authorities from time totime.See“Item 4.B.Information
318、on the CompanyBusiness OverviewRegulationsRegulations on Artificial Intelligence.”We may confront otherchallenges as we enter new business domains,including the lack of adoption of new products and services,the lack of management talent in the newbusiness,cost management and other factors required f
319、or the expansion of new businesses.We have experienced slowdowns and declines in our revenues,and we may sustain net loss from time to time,and we may experience downwardpressure on our operating and profit margins in the future.From 2018 to 2022,we experienced a slow-down in revenue growth or even
320、a decrease due to macroeconomic environment and the impact of theCOVID-19 pandemic.We could continue to experience a decline in our revenues,as a result of a number of factors,including changes in the mix ofproducts and services,customer demographics,industry and channel,changes in policy or policy
321、implementation,increase in market competition formarketing and/or new AI offerings,and decrease in pricing arising from an oversupply of advertising inventory in the market,which has been witnessedsince 2019.We may also experience a decline in our revenue or revenue growth rate,if there is a decreas
322、e in the rate of adoption for our products,services and technologies,or deceleration or decline in demand for platforms used to access our services,among other factors.Our operating margin and net income attributable to us as a percentage of revenue fluctuated notably from 2018 to 2022 due to macroe
323、conomicenvironment and the impact of the COVID-19 pandemic.We may experience downward pressure on our operating margin from increasing competition,revenue growth slower than expenses,and increased costs and expenses from many aspects of our business,including within online marketing whererevenue gro
324、wth does not keep up with traffic cost growth and related infrastructure costs to support our online properties,such as Baidu App,video-related and other products requiring huge data transmission and computing power.We may also pay increased fees for our distribution channels,as wellas increased con
325、tent acquisition costs to content providers.Additionally,an increase in personnel-related costs,an increase in spending to promote newproducts and services,the expiration of temporary tax exemptions or reductions,and the impact of the coronavirus(COVID-19),which has negativelyaffected our revenue gr
326、owth and delayed certain spending,may dampen our operating margin.We may also experience downward pressure on ouroperating margin resulting from a variety of factors,such as the expansion of our business into new areas,including AI cloud,intelligent driving,voiceassistant&smart device,all of which h
327、ave margins much lower than that of online marketing.Our operating margin may also be negatively impactedfrom a greater proportion of revenue contributed by new business areas,which has grown faster than online marketing.In addition,we may also sustain net loss from time to time due to investment im
328、pairment and foreign currency fluctuation.Declining operatingmargin and investment impairment have caused us to experience a net loss in the first quarter of 2020,and there is no guarantee that we will notexperience loss in the future.Due to these factors and the evolving nature of our business,our
329、historical revenue growth rate,historical operating margin and historicalprofitability may not be indicative of our future performance.24Table of ContentsIf we fail to continue to innovate and provide products,services and high-quality internet experience that attract and retain users,we may not bea
330、ble to generate sufficient user traffic to remain competitive;we may expend significant resources in order to remain competitive.Our success depends on providing products and services to attract users and enable users to have a high-quality internet experience.In order toattract and retain users and
331、 compete against our competitors,we must continue to invest significant resources in research and development to enhanceour AI or other new technologies,improve our existing products and services,and introduce additional high-quality products and services.If we areunable to anticipate user preferenc
332、es or industry changes,enhance the quality of our products and services on a timely basis or fail to provide sufficientcontent,or provide other consumer-facing services and products,including our maps and smart devices,to our users satisfaction,we may suffer adecline in the size of our user base.Our
333、 results of operations may also suffer if our innovations do not respond to the needs of our users,are notappropriately timed with market opportunities or are not effectively brought to market.As search,marketing and AI technologies and new forms ofdevices and apps continue to develop,we may expend significant resources in research and development and strategic investments and acquisitions inorder