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China watchdog orders Baidu to rework advertising strategy in paid search results

TheCyberspace Administration of China has ordered Chinese searchengine Baidu Inc. tore-engineer its business model after health experts and government officialsestablished a joint investigation into the death of Wei Zexi, the South China Morning Post reported.

Accordingto the CAC, Baidu's paid search results affected Wei's decision in choosing a propertreatment for his illness, and Baidu must redesign its search result model.

Baidu willnow have to remove from the listings all medical institutions that are notregulator-approved. The search engine also has to use proper labels for paidsearch results, which in turn should not make up over 30% of the list.

Lastly,Baidu is required to set up a compensation fund to support victims ofmisleading ads.

Wei, whowas a 21-year-old cancer patient, relied on a particular therapy that came upas a top paid search result in Baidu. It was offered by No. 2 Beijing ArmedPolice Hospital, where Wei and his family spent 200,000 Chinese yuan for whatturned out to be an experimental immunotherapy treatment. He eventually diedwhile undergoing treatment, which sparked a public outcry.

Last week,Baidu's shares slipped as concerns over the young man's death continuedto rise.

As of May 9, US$1 was equivalent to 6.51Chinese yuan.