C-Level Management Departures At Baidu.com (BIDU) Raises Concerns

After jumping higher recently on news Google (Nasdaq: GOOG) may pull out of China, shares of Baidu.com (Nasdaq: BIDU) are under pressure today as another key executive departure is raising some eyebrows.

Baidu.com announced this weekend that Chief Technology Officer Yinan Li has resigned from the company for personal reasons. This was the second major executive departure in as many weeks. On January 8th, Chief Operating Officer Dr. Peng Ye also resigned for personal reasons.

Baidu shares has jumped from their January 12th close of $386.49 after Google, its biggest competitor in the massively growing Chinese Internet search market, said it could be leaving the country after a security breach. Baidu is the obvious beneficiary if Google leaves. After trading up to $470.25 on the "Google's Leaving" trade shares of Baidu are down 7.2% today to $433.85.

Commenting on the executive departure news, analysts at Pali Research said, "we believe frequent management changes at the company speak to bigger issues at Baidu." The firm said this is not the first time Baidu has seen a wave of management changes. In 2008, almost all management at the executive level left and replaced, with the exception of the CEO. The firm said, "Baidu seems to have problems in keeping its talents." They note that CTO Yinan Li was in charge of the Phoenix Nest System and Aladdin project, Baidu’s next generation search technology. They said his leaving could prolong the rocky transition of Phoenix Nest and Aladdin’s progress.

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