The Three Open Letters from Hai Dong Pan, CEO of Interactive Encyclopedia, to Yan Hong Li

Reported on December 20th by Chinaz.com: Today, Hai Dong Pan, CEO of Interactive Encyclopedia, wrote an open letter to Robin Li, posing three questions. Pan believes that Baidu's corporate culture has encountered significant issues and hopes to exchange ideas with Robin Li regarding corporate culture.

The full text of the open letter is as follows:

First Question for Robin Li

Hi Robin,

I have always wanted to communicate directly with you, but various reasons have prevented it from happening. Today, I see your involvement in promoting the "Sunshine Action," and I can't help but worry that this sword of justice will be misused by Baidu, making me anxious about the long road ahead for innovation and development in China's Internet industry. This prompts me to write this letter to you and take the opportunity to deeply reflect on corporate culture and life values.

As fellow overseas returnees who started businesses back in China, I once had deep admiration for you. A few years ago, when I saw your photo on the cover of DFJ's annual report in their Silicon Valley office, I felt proud that a Chinese person could achieve such accomplishments, and excited to make a career in China's healthy Internet entrepreneurial environment. Tim Draper, one of DFJ's founding partners, also patted me on the shoulder and said he hoped I would become the next Robin Li. However, the more I learn about you and Baidu, I regretfully must tell my investors who placed high hopes on me, "I'm sorry, I've failed to live up to your expectations. I don't want to be the next Robin Li. I want to be the CEO of a great Internet company."

I consider myself a very good learner. As early as 2000, while studying in the U.S., I had the chance to meet internet elites like Jack Ma, Xingdong Fang, Yi Zhou Chen, and Li Gang Zhang. Their stories of success through hard work inspired me to strive to become a capable young person. After returning to China to start a business, I gradually gained a clearer understanding of successful people in the Internet industry.Jack Ma is a broad-minded preacher, Tianqiao Chen is a wise man who respects talents, Xingdong Fang is a persistent forward marcher, Hongyi Zhou is a fighter with clear love and hate... But how do I evaluate you? You are a successful person. You are the CEO of a profitable company. But that's all.

I once read some media reports saying that some websites were blocked because they did not place advertisements on Baidu. At first, I didn't believe it. Later, when many friends around me told me about their painful experiences, I became extremely angry. The founder of the "Mom Says" website, Jack Ma, is a successful entrepreneur. He told me that his site stopped placing ads on Baidu because the ad effect was poor. Salespeople soon followed up hoping to continue placing ads on Baidu, but were refused. The next day, the "Mom Says" website was almost unsearchable on Baidu. Although he has been working in the Internet industry for many years, through channels and communication with Baidu insiders, after much difficulty, there was a slight recovery. For such a startup company's website, losing Baidu traffic dealt a heavy blow to the site.The relentless pursuit of revenue drives Baidu employees to resort to any means necessary. Many victimized websites endure silently out of fear of completely losing traffic from Baidu.

There are also media reports stating that some websites were blocked due to competitive relations with Baidu's business. I believe this. Taobao had to block Baidu from indexing its content due to being blocked by Baidu. Our interactive encyclopedia receives so little traffic from Baidu that it makes me doubt whether Baidu is the world's largest Chinese search engine. A friend of mine, also a specially appointed expert under the Thousand Talents Plan, told me during a summer vacation organized by the Central Committee of the Party that his website was blocked by Baidu because it competed with one of Baidu's products, asking if I could introduce him to someone at Baidu for communication. That was a website with quite low visitation volume, yet it was mercilessly blocked simply because of competition. The team in the early stages of entrepreneurship was at a loss, unsure of what to do next.

Regarding Baidu's bidding ranking system, I believe it openly harms vulnerable groups. Consider those searching for disease treatment methods on Baidu. Those with connections would seek medical care through acquaintances. Only those without connections or unfamiliar with the Internet would click on pharmaceutical advertisements mixed within search results. Most of them are elderly people with low education levels and incomes, truly belonging to the disadvantaged group. Trusting Baidu completely, they click into pharmaceutical advertisement sites, spending large amounts of money on ineffective counterfeit drugs. They don't trust small ads on roadside utility poles; they trust Baidu, but they didn't expect Baidu to be a larger hub of small ads. Here, these small ads use high-tech means to exert even greater harm.

In Hong Kong movies like "Infernal Affairs," it says, "If you mess around, sooner or later you'll pay." Perhaps it's a joke. But such scenes play out in real life. Baidu made 3 million yuan helping Sanlu Group suppress negative news about the melamine-tainted milk powder incident. When the truth came out, it incited public anger, forcing Baidu to spend 30 million yuan on emergency PR, which proved counterproductive. Furthermore, looking at the rapid turnover of Baidu executives and lawsuits due to copyright infringement, I believe that Baidu's corporate culture has serious problems. I also want to exchange ideas with you regarding corporate culture.

Wishing you well!

Second Question for Robin Li

Hi Robin,

Baidu hires top university students and industry elites. Why can they, upon entering Baidu, resort to any means necessary just for profit? This is a thought-provoking question.

I once exchanged views with some Baidu technical personnel. I asked them why they didn't put more effort into improving search algorithms, because in terms of overall search experience, Google is indeed much stronger. One technician hesitated for a long time before revealing the true situation:Because Baidu's search results are heavily manually manipulated. He explained that Baidu's indexed websites are divided into several databases, each corresponding to different weights (priorities). If you want to promote your own product or suppress competitors or sites that stop advertising, you can directly adjust the corresponding websites into the appropriate database, giving them promotion or demotion handling. This human factor renders the parameters set by the search algorithm machine useless, frustrating the technicians greatly.

I also exchanged views with some Baidu product personnel. I asked them why they lacked a sense of accomplishment. They indicated that their product's success wasn't due to innovation but because of Baidu's large traffic volume. Moreover, many products achieved success by suppressing competitors. A company with over ten thousand employees sacrifices the most basic ethics of a search engine—fairness—just because it fears the products of companies with dozens or hundreds of employees. This is the fundamental reason.

I also heard your employees frowning as they talked about you saying at the company meeting that Baidu should be the most profitable company. I also heard your employees blushingly recounting how you said at the product meeting that you aimed to destroy Interactive Encyclopedia in 2009. I also heard your employees painfully mentioning how you, concerning the company’s WiFi issue, said that if employees wanted to stay at Baidu, they should work hard, otherwise, they should leave. I also heard your employees bitterly laughing as they recounted your complaints about how confused you were that despite treating your employees well, they still wouldn’t cooperate.

"Bitter medicine cures diseases." Perhaps I have no right, but I still have to say: Robin, you're too successful, you're aloof, closed yourself off, and lost yourself. Your crew doesn't know where the captain is steering the ship.

I once had a brief exchange with Shawn. He was very capable, had great charisma, and was very humble. I always thought he was the best candidate for Baidu's CEO. Unfortunately, he passed away prematurely. I also had a short contact with another senior executive at Baidu later on. However, after the Tang Jun diploma scandal broke out this year, many celebrities went to Interactive Encyclopedia to modify their resumes, and I also received an email from this friend requesting resume corrections. I couldn't help but feel ashamed, not knowing what to say.

This September, I participated in the Jinggangshan journey organized by the Party School. We retraced the Zhu Mao grain-carrying trail. The Workers' and Peasants' Red Army stayed in Jinggangshan for only two years, but it was a crucial stage in the development history of our party and army. Mao Zedong wrote important articles guiding the Chinese revolution in the Eight-Angled Tower: "Why Can the Red Regime Exist in China?" and "A Spark Can Start a Prairie Fire." Zhu Mao led the Workers' and Peasants' Red Army, akin to today's entrepreneurial teams, creatively combining Marxism with the specific practices of the Chinese revolution. This was innovation, leading to the ultimate victory of the Chinese revolution. Why could they win in the struggle against the Nationalists? They had no money, no status, no guns, no food, no land, but they shared a common core value: eliminate the unequal system and establish a new China. Baidu needs to genuinely reshape its core values. The founder and CEO need to think broadly about the company's long-term development.

Only by raising children do we understand parental kindness, and only through entrepreneurship do we recognize the difficulties of all things. As a successful startup company, Baidu has come a long way, achieving continuous brilliance. Personally, I hope Baidu can go further, not just be the most profitable company, but to become a great and respected company.

Wishing you well!

Third Question for Robin Li

Hi Robin,

Today, I find more and more people in the industry lamenting the disappearance of China's Internet innovation environment. Mr. Lu Xun's early advocacy of "Fair Play" is now mere empty talk.

I've been thinking about why it's difficult for China to produce great Internet companies that succeed through innovation. Google hasn't abused its market dominance to act arbitrarily, nor has it used its traffic advantage to confront rivals everywhere. Instead, they've developed innovative products like the Android platform and driverless cars, advancing technological progress while earning profits. In fact, Baidu had such opportunities and could have laid the foundation for becoming a great company by developing a few epoch-making innovative products. But Baidu is busy making money, busy keeping traffic on its own site, busy attacking big and small opponents, leaving the world with the regret of "Once there was an opportunity before me, and I didn't cherish it."

Baidu's culture states "Help others, achieve oneself," but Baidu often plays the role of "Striking others, achieving oneself". You say that Baidu has been fighting against bad information for ten years, but the "bidding ranking" you've persisted with since its launch has been striking many small and medium-sized websites that are either startups or struggling to operate; it has struck down the entire search industry's technological innovation; and it has struck down the establishment of societal commercial civilization.

It's obvious that you cannot guarantee or convince anyone that the "Sunshine Action" sword of justice won't be misused as a tool to strike opponents. People are more willing to believe that the "Sunshine Action" you're involved in promoting won't impose any constraints on Baidu's existing commercial interests but will instead provide faster and more concealed channels for Baidu's misconduct. I can't help but think that if you had adhered to your original ideals, focused on the search platform, delved deeply into the core technology of search engines, not been driven by the desire for money, and refrained from building a tyrannical Baidu empire, you would have had the ability to create a positive, open, equal, and innovative ecosystem and landscape for China's Internet.

Looking at Baidu's search result pages, I don't know if I'm searching for Baidu's Internet content or China's Internet content. I would like to solemnly state: Baidu, you represent China's Internet, but you are not the entirety of China's Internet.

Reflecting on the development process of China's Internet industry, this is the most internationalized industry, but the abuse of market dominance has become increasingly severe, and Internet innovation is gradually being stifled. As a member of the younger generation of Internet entrepreneurs, I may not succeed, I can return the investment to my trusted investors, and I can accept losses in a fair market environment and lead my team to start anew. However, for the sustainable development of China's Internet industry, for the continuous innovation of China's Internet industry, for Baidu to become a great company, and for the innovation and labor of millions of Internet entrepreneurs and professionals not to be wasted, I will make the following suggestions to relevant departments and will spare no effort, even risking my life, to achieve this:

Please approve that on the first page of search results for Baidu and other search engines, there should be no advertisements, and no web content from the search engine itself or its actual controlled websites should appear.

I hope you agree.

Wishing you well!