When Baidu first announced it's plans to go public, some noted that part of Baidu's success was based on how it helped people find free music and movies. By going public in the US, however, the company would face even more pressure to block downloading of such content, which could make it lose its one big competitive advantage over other search engines. So, a few weeks after that discussion, it wasn't all that surprising to see Baidu talking about how it was going to start blocking downloads of unauthorized content. Seeing as that was one big advantage of the service, it might make investors think twice about buying into the offering. However, this story has mostly stayed out of the news -- and investors who can't think past "search is hot" and "China has billions of people, many of whom are on the internet" are likely to still be interested. However, the whole unauthorized download issue won't leave them alone. Just days before the expected IPO, out comes the news that two Chinese companies were suing Baidu for copyright violations. Of course, what's not clear in any of this is how responsible Baidu really is. Is the complaint that the search engine simply leads to unauthorized files as people do a search, or is it actively participating in hosting and offering the files? If they're just a search engine, it's hard to place the blame on Baidu. Either way, though, this latest news is likely to get some investors to at least look at the issue of how Baidu attracts visitors -- though, they may not realize the extent of it.
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