Baidu Inc's CEO has called on employees to put values before profit in response to a scandal around the death of a student who underwent an experimental cancer treatment he found on the company's search website.
Before his death, Wei Zexi, 21, criticized the military-run hospital that provided the failed treatment for misleading claims about its effectiveness and accused Baidu, which controls 80 percent of the Chinese search market, of promoting false medical information.
In a letter to employees seen by Reuters on Tuesday, Baidu Chief Executive Robin Li Yanhong wrote, "If we lose the support of users, we lose hold of our values, and Baidu will truly go bankrupt in just 30 days!"
Li's letter said employees were making compromises for the sake of commercial interests and placing earnings growth above user experience.
The controversy over Wei's death, which erupted at the beginning of the month, prompted regulators on Monday to impose curbs on the advertising business Baidu relies on for the lion's share of its income.
The Cyberspace Administration of China (CAC) on Monday told Baidu to formulate a new algorithm based on credibility by May 31 and strictly limit the proportion of promotional content in a webpage to within 30 percent.
Baidu relied excessively on profits from paid listings in search results, and it did not clearly label such listings as the results of commercial promotion, compromising the objectivity and impartiality of search results, the CAC said following a week-long investigation into Wei's death.
The CAC and the State Administration for Industry and Commerce will soon introduce regulations on Internet information search service and interim measures to manage Internet advertising, the Xinhua News Agency reported.
Baidu said on Monday it will comply with the regulators' decision.
The company will reevaluate every one of its products' business models, although this may have a negative impact on the company's income, Li wrote.
Baidu has been criticized online and by State media for how it handles advertising within its search results, especially in the healthcare sector.
"These days, whenever it's the dead of night, I think: Why do the people who use Baidu's products no longer love us?" Li wrote. "The outrage is greater than in any crisis Baidu has experienced before."
It is not the first time the company has fallen foul of regulators and public opinion for its handling of healthcare ads and blogs. It has previously changed elements of its business model in response.
"I believe this is the right way!" said Li in his letter. "It's the long-term way!"
