Sharon Ng - Baidu, Inc. Robin Yanhong Li - Baidu, Inc. Qi Lu - Baidu, Inc. Jennifer Xinzhe Li - Baidu, Inc.

Eddie Leung - Bank of America Merrill Lynch Chi Tsang - The Hongkong & Shanghai Banking Corp. Ltd. Alicia Yap - Citigroup Alan Hellawell - Deutsche Bank AG (Hong Kong) Alex Yao - JPMorgan Securities (Asia Pacific) Ltd. Juan Lin - 86Research Ltd. Natalie Wu - CICC Piyush Mubayi - Goldman Sachs (Asia) LLC Karen Chan - Jefferies Hong Kong Ltd. Grace Chen - Morgan Stanley Taiwan Ltd. Ming Xu - UBS Securities (Asia) Ltd. Evan Zhou - Credit Suisse (Hong Kong) Ltd.

Hello, and thank you for standing by for Baidu's First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sharon Ng, Baidu's Director of Investor Relations. Sharon Ng - Baidu, Inc.: Hello, everyone, and welcome to Baidu's first quarter 2017 earnings conference call. Baidu's earnings release was distributed earlier today, and you can find a copy on our website as well as on Newswire services. Today, you will hear from Robin Li, Baidu's Chief Executive Officer; Jennifer Li, Baidu's Chief Financial Officer; and Qi Lu, Baidu's Chief Operating Officer. After their prepared remarks, Robin, Jennifer and Qi will answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the SEC; including our Annual Report on Form 20-F. Baidu does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Our earnings press release and this call include discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures, and is available on our website at ir.baidu.com. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will also be available on Baidu's IR website. I will now turn the call over to Baidu's CEO, Robin Li. Robin Yanhong Li - Baidu, Inc.: Hello, everybody, and thank you for joining today's call. Earlier today, we announced that Jennifer will become CEO of Baidu Capital, an investment firm. Jennifer will transition away from her responsibilities as CFO, following the appointment of her successor. Jennifer has played an instrumental role in Baidu's growth over the nine years she has been our CFO. And as CEO of Baidu Capital, she will continue to be part of the Baidu family and contribute to building Baidu's ecosystem, which is crucial in bringing AI to real world applications. Jennifer's extensive experience in the area of finance, capital markets, technology, auto, financial services, and consumer industries will help bridge technology as well as traditional industries. And I look forward to working with Jennifer in her new capacity. Now, turning to the quarter. I will begin with a few brief comments, and then Qi will provide a business review, and Jennifer will present the financials. 2017 is shaping up to be a transformational year for Baidu, as we complete our strategic evolution to China's largest AI-centric technology company. We believe that a great technological revolution comparable to the industrial revolution is taking shape, representing a once-in-a generation opportunity that will create new commercial frontiers and transform a wide range of industries, such as auto, healthcare, education, financial services, and industrial automation. In the AI enabled era, the scenarios for human machine interaction will be much broader than what we've seen before. And as natural language understanding and image recognition power new information gateways, the new paradigms for human machine interaction will have significant implications for how people conduct their daily lives. I'm confident that Baidu's advantages in technology, specifically advanced AI research will position us to be the industry leader for the long-term. Search is one of the first applications of AI where search works to understand human. As the leading search engine in China, we have been fortunate to amass vast amounts of rich, valuable data in a market with over 700 million Internet users who speak the same language, have the same culture, and abide by the same laws. Moreover, we live in an age where we can finally match this data with powerful efficient computing infrastructure, and a deep bench of talent to make real progress in AI. We believe Baidu's opportunity to apply AI to real world consumer and enterprise applications in China is enormous. We envision a world where machines continue to learn about humans. In the not so distant future, using natural voice input or images to interact with machines will be mainstream, alleviating humans of the burden of mutant tasks. We imagine a world where your face is your identity and you only need to show your face to pay at the supermarket or goes through airport security. Cars will drive us, freeing up our time and attention. As machines become more like hyper efficient, real-time assistants for people, the mode of user interaction is evolving correspondingly. Just as the mouse and keyboard were the gateways in the PC era and touch is the gateway for mobile, voice recognition through conversational DuerOS will be the gateway in the China plus AI era. Our investment in AI is a long-term proposition with dividends that will be paid over the medium to long term. We're already seeing the powerful benefit of AI in our existing online advertising platform and in a more personalized, more image enhanced and more predictive search experience. Beyond the existing PC and mobile channels, AI will expand the scenarios and use cases for search in home, car, and work, and lower the friction for search through voice recognition, image recognition, and user personalization. Our strategy is clear and we're working hard on multiple fronts. I'll now turn the call over to Qi to go through our business progress. Qi Lu - Baidu, Inc.: Thank you, Robin. To build on Robin's key points, operationally here at Baidu, we very much focus on building and applying AI technologies as the foundation of what we do, and the primary driver of product innovation and business growth. Over the past three months, I have spent the majority of my time working with our product and business teams to map out our strategy and the ways to drive high-performance execution. Our focus is two-fold, to enhance and expand our existing core business platform, and to lead the commercialization of AI technology across a number of AI-enabled new business initiatives, such as our AI-cloud, financial services, DuerOS, and autonomous driving. For our new business initiatives, we have gone through a rigorous and disciplined process to evaluate and select the most promising new business opportunities to pursue. Our criteria includes, category lifecycle, market penetration, Baidu's competitive position, differentiated value propositions, and our ability to execute. We will be shedding more light on the process and the progress of these new business initiatives, and sharing operating metrics as appropriate as we move forward. On our core business front, we are off to a good start, driving improvements in both traditional core search, as well as in our news feed product. Search is and will continue to be a fundamental user need, especially as we digitize more and more world information in our daily lives. We see much more room for innovation to deliver a better user experience with richer information using interactions as we expand search into more and more scenarios. For example, we are making great strides in enriching our search results, especially with video. In fact, now over 25% of mobile queries have rich video content as part of the search results, representing a material increase over last year. We are also making our search experience on mobile devices more natural and easy to navigate using touch. The experience is much more engaging, like that of our mobile native apps as compared to the traditional browser-based experience. This is achieved through intelligent filtering and the presentation technologies, based on our AI capabilities, in content and user intent understanding especially in more advanced areas, such as classification and object recognition in images and videos. With the twin engines of search and news feed, we have broadened our core product experience by complementing the explicit intent-driven, pull experience of the traditional search with implicit user understanding-driven, push experience of news feed. While we are pleased with the rapid user adoption of our news feed product with daily active users reaching 83 million this month, and the overall volumes of content distributions and the user time spent reaching a new weekly high, we will stay laser-focused on improving the user experience and building out our content platform, especially the number of content creators on our Baijiahao content platform has surpassed 450,000, more than doubling over last quarter, becoming an increasingly important part of the Baidu overall information ecosystem. Now, speak of ecosystem. Maps, Nuomi, and the Local Express continue to play a vital role in connecting users with local content and services, and helping local businesses connect with users through our search, feed and advertising products. Operationally in Q1, we consolidated Nuomi into our core business. Going forward, our focus for Nuomi will be building more and a better content of our local services and the monetization through advertising through Local Express, instead of just transactional business. All of these improvements to our core products and ecosystem are reflected in the growing engagement of our users, with the ratio of mobile search daily active users to monthly active users showing a clear upward trend. On the commercial product front, we added upgrades to our search ad platform, making click to connect ad formats available across search, Union and the news feed. This has yielded a notable lift in monetization. We are also actively developing and applying AI technologies across a number of key areas such as ad targeting, creative and landing page optimization, which will contribute to increasing monetization capabilities over time. While monetization is still at an early stage for news feed, customer feedback has been very positive, they view news feed traffic as incremental to their campaigns. Late last year, we also launched a dedicated news feed ad platform to complement news feed bidding within our search ad platform, and customer campaigns through this dedicated channel is ramping up at a rapid rate. Now turning to AI-enabled and new business initiatives. We are making good strides across the board, and here a few specific areas to call out. DuerOS is our next-generation conversational AI platform. By design, it provides powerful capabilities to enable the use of voice in natural language to interact with any digital experience on any device, for any scenario. This is because for the first time in our history, AI technology enables natural language to serve as a general purpose user interface. While it is still early, this platform will have enormous potential relative to the traditional platforms, because it can run everywhere, and it enable users to interact naturally and easily. We believe we are the clear market leader in China. DuerOS has already gained great momentum in building out its ecosystem. For example, we have secured broad partnership to power conversational AI services for Xiaomi and the Vivo smartphones, Lenovo smart TV, Haier, and Midea smart appliances, HARMAN smart speakers and many others across rapidly growing number of devices. Home and cars are two high value scenarios to anchor the DuerOS platform at this early phase. Here we have made important investments in our Raven Tech acquisitions, as well as our Internet of Vehicles business unit. Both of which will help further establish the DuerOS platform and strengthen our market leadership position. At the same time, both in their own right will have significant business opportunities that we will grow into. In Q1, we consolidate our L4 and L3 and Internet of Vehicle Business Unit into the new IDG, Intelligent Driving Group. This will enable us to build out a common technology platform, shared services, and a consistent solution for all our partners. At the Shanghai Auto Fair last week, we announced project Apollo, an open, complete, and reliable autonomous driving technology platform that we plan to launch in July. This is a historical opportunity to apply our AI technology strength to create an open innovation ecosystem that will empower all parties in the auto industry to accelerate the pace of innovation, enable more win-win partnerships, create greater business opportunities in this vast and rapidly growing market. The response from the industry and our partners has been very positive thus far. It is a big step forward. Our AI-cloud business named as ABC or AI Big Data and Cloud has been gaining traction with our customers, who appreciate our AI value-added approach. Baidu Cloud builds upon foundation of cloud solutions of computing, storage and CDN. We differentiate by providing AI technology enabled solutions, such as Big Data, deep learning, video, IoT and more. Customers across media, financial services, healthcare and other verticals have expressed very positive feedback. This month at the Baidu Cloud ABC summit, together with NVIDIA, we announced the establish of the Baidu Deep Learning platform which will greatly help our customers and partners to enhance their capability in Deep Learning and AI. Our Financial Services business continues to grow as our AI and Big Data capabilities serve as key differentiators that can intelligently target and match users with the right products, identify and prevent fraud and appropriately assess credit risk through our continuously increasing proprietary data and modeling capabilities. iQiyi, which celebrated its seventh anniversary this month, continued its sector leadership with ongoing improvements in revenue and paid subscriber numbers. In March, according to iResearch, iQiyi's mobile app maintained its top ranking with 129 million daily active users, 490 million monthly active users, and 342 billion minutes of monthly user time. We will continue to work closely with iQiyi to support its growth as part of the overall Baidu ecosystem. Baidu Deliveries with its first rate service quality and clear technology advantage made a strong progress in the quarter, seeing healthy revenue growth year-over-year. In March, during the International Women's Week, Baidu Deliveries ran a highly successful special joint promotion with Yum China's KFC and the Pizza Hut brands. In conclusion, we are very pleased with our progress in Q1, and we are more confident and energized about using AI to elevate our core products and the business and to create long-term values through our next-generation AI enabled new business initiatives. With that, I will turn it over to Jennifer to go through the financials. Jennifer Xinzhe Li - Baidu, Inc.: Thank you, Qi. Hello, everyone. In the first quarter, we bought back about $200 million of our own stock. We are very confident in Baidu's long-term outlook, and this decision is consistent with our overall capital allocation framework. We had a solid first quarter with the business performing to our expectations. As we're moving from mobile first to AI first, we work to align our business operations by folding Nuomi into our core business. Nuomi will play a role to serve as part of the core business' content and service ecosystem. We'll continue to scale back spend for Nuomi, and shift Nuomi from a take-rate transaction based business model to an advertising-based business model, which leverages our core business. We do not expect Nuomi to be a significant contributor to margin drag going forward. Other components in Transaction Services such as Maps, Financial Services, and Baidu Deliveries are also part of our core businesses content and service ecosystem, with Financial Services and Baidu Deliveries very much leveraging our AI capabilities. Baidu Deliveries continues to show improving operational efficiency, and a visible path to sustainability and profitability. Consistent with our strategic and operational focus to build our core business and invest in AI, we intend to realign our segment reporting, and fold Transaction Services into our core business. Starting next quarter, we'll report Baidu Core as a whole and Transaction Services will no longer be a separate segment. As Robin and Qi have shared, and as we have been communicating to you in the past few quarters, AI is the core of our strategy, and is both the foundation of our existing platform and driver of vast opportunities going forward. We are continuously leveraging our existing technology capabilities, and devoting resources to our AI-enabled initiatives of enterprise cloud, financial services, DuerOS and autonomous driving. The majority of these investments are on the R&D front, which we expect to bear fruit in the medium to longer term. This year, we expect incremental R&D expenses over 2016 to be all related to AI. Incremental R&D spend this year is largely related to AI R&D head count. As a reminder, as disclosed in our 20-F form, we disposed of our mobile gaming business for RMB 1.2 billion, a transaction which is expected to close mid-May. After mid-May, we will no longer recognize revenue for the mobile gaming business. The mobile gaming business contributed close to 3% of total revenue in 2016. Now moving to the financials, all monetary amounts are in RMB unless otherwise stated. For the first quarter, total revenues were RMB 16.9 billion, representing a 6.8% increase from the corresponding period in 2016. During the first quarter, Baidu had approximately 451,000 active online marketing customers, representing a 23% decrease from the corresponding period in 2016 and flat compared to the previous quarter. Revenue per online marketing customer for the first quarter was RMB 32,200, a 27% increase from the corresponding period in 2016, and a 9% decrease compared to the prior quarter. Traffic acquisition cost as a component of cost of revenue in Q1 was RMB 2.2 billion, representing a 12.9% of total revenues compared to 14.1% in the corresponding period in 2016, and 14.5% in the fourth quarter of 2016. Bandwidth costs as a component of cost of revenue in Q1 were RMB 1.3 billion, representing 7.9% of total revenues compared to 6.9% in the corresponding period in 2016. Depreciation costs as a component of cost of revenue in Q1 were RMB 823 million, representing 4.9% of total revenues compared to 4.5% in Q1 of 2016. Operational costs as a component of cost of revenue in Q1 were RMB 959 million, representing 5.7% of total revenue compared to 6.9% in Q1 last year. Content costs as a component of cost of revenue in Q1 were RMB 2.6 billion, representing 15.6% of total revenue, compared to 8.7% in the corresponding period in 2016. This increase was mainly due to iQiyi's increased content costs. SG&A expenses in Q1 were RMB 2.8 billion, representing a decrease of 29% from corresponding period in 2016. The year-over-year decrease was primarily due to a decrease in promotional spending for transaction services. R&D expenses in Q1 were RMB 2.8 billion, a 35% increase over the corresponding period in 2016. The increase was mainly due to growth of R&D personnel related expenses. Share-based compensation expenses, which were allocated to related operating and expense line items, increased in aggregate to RMB 631 million in Q1 from RMB 309 million in the corresponding period in 2016. This year-over-year increase was a result of increased share grants to employees. Operating profit for Q1 was RMB 2 billion, representing a 9.3% decrease from the corresponding period in 2016. Non-GAAP operating profit was RMB 2.6 billion, a 4.6% increase over the corresponding period in 2016. Income tax expenses was RMB 405 million for the first quarter. The effective tax rate for the first quarter was 18.6% compared to 25.4% in Q1 2016. The decrease in the effective tax rate reflected our operating loss narrowed for some loss-generating entities in the group. Net income attributable to Baidu for Q1 was RMB 1.8 billion, a 10.6% decrease from the corresponding period in 2016. Basic and diluted earnings per ADS for the first quarter amounted to RMB 4.65 and RMB 4.63, respectively. Non-GAAP net income attributable to Baidu for Q1 was RMB 2.4 billion, a 1.3% increase year-on-year. Non-GAAP diluted earnings per ADS for Q1 was RMB 6.85. As of Q1, the company had cash, cash equivalents and short-term investments of RMB 90.7 billion. Net operating cash flow (sic) [inflow] (28:38) and capital expenditures for the first quarter were RMB 4.7 billion and RMB 1.2 billion, respectively. Total head count on a consolidated basis including invested entities was about 43,400, as of the end of first quarter of 2017. This represents a decrease of 5.5% as compared to the end of last year (sic) [quarter] (29:04). Now let me provide you with our top-line guidance for the second quarter of 2017. We currently expect total revenue for the second quarter to be between RMB 20.47 billion and RMB 20.98 billion, representing an annual increase of 12.1% to 14.9% and the sequential increase of 21.2% to 24.2%. Please note, this forecast reflects Baidu's current and preliminary view, and is subject to change. I will now open the call to questions. Operator, please go ahead.

Thank you. The question-and-answer session of this conference call will start in a moment. Your first question comes from the line of Eddie Leung from Merrill Lynch. Please go ahead. Eddie Leung - Bank of America Merrill Lynch: Hi, good morning. First of all, my best wishes to Jennifer for your next role. And then for my questions, I'm wondering if you could share more color with us on the different components of your revenue guidance for the second quarter, especially any color on the contribution of our subscription and the newer business, mobile news feed will be helpful? Thank you. Jennifer Xinzhe Li - Baidu, Inc.: Hi, Eddie. Thank you for your kind words. With regards to Q2 revenue, as you look at our business, essentially it's the core business as well as iQiyi that are the main revenue contributors. Within the core business, there is search, we're also putting a lot of efforts in the feed. The feed product, as Qi mentioned earlier, from a user adoption perspective, it's progressing very well. We're in the early stage of monetizing the product. So we had not been very much focused on or driving aggressively on the monetization front. So for our core business, it continues to be very search centric, and we are very excited to expand the service we can offer to our users and advertisers, and we expect a solid progress in that regard, and we should expect the search business to extend over the next few quarters. For the iQiyi business, as you would have seen from our 20-F, last year iQiyi had a very solid growth and the contribution to our overall business. iQiyi is integral part of the overall Baidu ecosystem, and they continue to deliver very strong top-line growth driven by the business model of the subscription user base. So if you look at Q2, sequentially, you continue – Q1, sequentially you continue to observe other revenue line continues to grow quarter-on-quarter, and a big part of that is iQiyi's a subscription user business. So iQiyi's revenue growth is on solid ground, the two engine advertising as well as subscription fees continue to grow very well. So we're still on the path of recovery from last year's incident, and search is ramping up very nicely.

Your next question comes from the line of Chi Tsang from HSBC. Please go ahead. Chi Tsang - The Hongkong & Shanghai Banking Corp. Ltd.: Good morning, everybody, and again congratulations, Jennifer, on this next opportunity. I wanted to ask you about core search. In particular, I was wondering if you can touch on traffic as well as demand. On the traffic front, what are you guys seeing in terms of growth in traffic and maybe growth in paid clicks year-to-date? And I'm wondering, if you expect paid clicks to grow faster this year than last year? And then, in terms of demand, given the rebasing of your customer base, as well as with higher standards, what type of customer growth do you expect this year? Thanks so much. Jennifer Xinzhe Li - Baidu, Inc.: I'm going to take the first cut on Chi's question, and Qi and Robin can feel free to add. The traffic as overall continues to be very solid, mobile continues to be growing nicely, and a bigger proportion of the overall traffic. As you know, I mentioned earlier, the feed product is also we're busy developing that and seeing good progress on that. So from our product service perspective, we have the nicer search traffic as well as user engagement, that user has more time and interesting topics that they can view on the Baidu platform. For us to build in more of these inventories, it create more of the user products, it provides a bigger advertising pool and inventory for our advertisers. So I think going into 2017, later in the quarter, we should continue to expect that the paid clicks will power the growth of monetization. From a – the other question? Chi Tsang - The Hongkong & Shanghai Banking Corp. Ltd.: Customers, yeah. Jennifer Xinzhe Li - Baidu, Inc.: Customer, customer wise also, I think seasonally Q1 was a low quarter, and I think for the remainder of the year, as we have richer product for our advertisers and our sales force, refocus their efforts to develop the market, we should expect the customer base to grow as well. Qi Lu - Baidu, Inc.: Yeah. Let me just add to what Jennifer described. With regard to search traffic, as we mentioned earlier, we view search as a fundamental human need, user need, and as we digitize more and more information, digitize more and more daily activities, the search overall demand will increase, that's number one. Number two, in current forms user express their intent through keywords, query input, landing on a set of information that will see its natural pace of growth as you have seen – our industry in China has been expanding so far. However, what I'll emphasize there is through AI technology innovations, we believe we can over time expand our search traffic by additional user experiences, for example you can search based on voice, you can search based on image, and more and more content will be available for search. So our focus is tapping into the current trend of user traffic growth for sure. At the same time, focusing on building better experience, more search capabilities, expanding into more search scenarios over time to expand search traffic. On the click, paid click side, again the pattern will be similar. The focus would be using AI technologies to understand the user intent better, and enable that to expose to advertisers, to our business customers, so that advertisers will have over time richer opportunities to place their campaigns as part of product, so that we have more opportunities to tap into the ongoing growing demand of advertising needs. So netted out, there's existing forms that's growing at its current pace and we're also focusing on tapping into future user traffic and future paid click growth opportunities through AI, through technological based enablement.

Your next question comes from the line of Alicia Yap from Citigroup. Please go ahead. Alicia Yap - Citigroup: Hi. Thank you. Good morning, Robin, Jennifer and Dr. Lu. Thanks for taking my questions. My questions is related to margins, so your comments of the operating margin including Baidu Core versus the Transaction Service, where Transaction Service 16.8% point reduction, does that mean in Q1, the margin on the Transaction Service only include the Baidu Takeout Delivery and the Map, but the Nuomi expenses is now part of the Baidu Core. And then how should we be thinking about the overall core margins in the future with news feed becoming a more meaningful part of the contributions? And then related to that, I wanted to ask about the content costs on the iQiyi front, is all the RMB 2.6 billion in Q1 is all related to iQiyi? Is there anything on that is related to the news feed content? And then with iQiyi recent licensing deal with Netflix, does the content cost guidance of doubling year-over-year this year still hold true, or should we expect even more than double in the content costs? Thank you. Jennifer Xinzhe Li - Baidu, Inc.: Thank you, Alicia. So a few questions. First of all, the margin drag that we reported on Transaction Services was reported on the same concept and definition, consistent with the prior quarters. This is to give you an idea, and you can clearly see that we're reducing the investments on this front and we're shifting from mobile to AI. And so for your specific comment, Nuomi was included in this number and included in the Transaction Services, as a reminder, also has Financial Services, Baidu Delivery, Map and Nuomi, and so these are the main components. As I mentioned earlier, we'll continue to reduce spend on Nuomi and the other elements within the old transaction services sector has to do with core search or AI related initiatives. So, it doesn't really make sense for Transaction Service to stand as a separate sector, but for your information it's more to giving you an indication for this quarter that we are reducing spend on this front. For news feed, as mentioned before, news feed carries a different margin profile, and we're in the early stage of developing its business model from an advertising perspective. Currently, we're focusing on driving the user experience, user adoption, so investment related to feed has to do with the ecosystem buildup, content acquisition, R&D efforts, and some you can say infrastructure related, bandwidth and depreciation related to servers, because we're building the user traffic on the front. We haven't really focused on the advertising effort, but as Qi mentioned earlier, the business model is pretty apparent and the customers are quite open and acceptive to this advertising model. So, over time, we will ramp up the advertising and monetization capability. But at this point, it's very early stage. With regards to the content cost for Q1, yes, predominantly a biggest of majority of the Q1 content expense was iQiyi related. And as we mentioned earlier, our expectation is this year there will be a very important content investment mainly for iQiyi and also partly related to our feed product. The overall guidance we provided earlier that the content cost will likely go up the same percentage as before that estimate is still hold.

Your next question comes from the line of Alan Hellawell from Deutsche Bank. Please go ahead. Alan Hellawell - Deutsche Bank AG (Hong Kong): Great. I just wanted to join the chorus in thanking Jennifer for setting a high watermark in the industry as a CFO, and also wish her the very best in her new role. A question around the interplay between demand for our search and news feed products. I can see key accounts scratching up new incremental budget to buy news feed ad, but I wonder if it is more cannibalistic to our budget limited SMEs that generally prefer the more focused sales generation aspects of buying a keyword to the more impression based aspect of news feed ad. And then just a quickie, a disclosure-related question. By folding in Transaction Services to Core search, are we no longer going to segregate out margin drag from Transaction Services and maybe even iQiyi? Thank you. Qi Lu - Baidu, Inc.: Let me first answer the first part of the question about on the demand side. The evidence so far has been showing a overall healthy growth and a specific evidence, I'll call out, is that, we have enabled our customers to place their campaign and budget in two ways. One is through their search campaign, they can indicate how much to go to the feeds, and there is also a separate interface that they can explicitly say, these budget will be on the feed side. There's a clear upward trend, a very rapid growth for customers, explicitly placing more campaign budget on the feed side, while maintaining their search campaign, search budget, and that's a clear signs of healthy growth, overall growth for our advertising needs for combined search and the feed products, number one. Number two, over time, we'll become more apparent that feed in many ways enable brand advertising to have a meaningful play at platforms. This is again very early. We're more focused on getting user experience to be truly, truly compelling and grow our user base and time spent. But from campaign demand perspective, our combined search and feed will enable more overall growth, not just from the traditional performance-based advertising into brand awareness based advertising as well. Jennifer Xinzhe Li - Baidu, Inc.: And Alan, to your second question, yes, we're folding Transaction Services into Core, however, we will continue to separately identify iQiyi as a separate segment and report separately its margin impact on a quarterly basis.

Your next question comes from the line of Alex Yao from JPMorgan. Please go ahead. Alex Yao - JPMorgan Securities (Asia Pacific) Ltd.: Hi. Good morning, everyone. Thank you for taking my question. I have a question on the Apollo project you guys announced recently. Does that make your autonomous car research project, open source type of the project, which will potentially impact your monetization capability. If it's not, can you help us understand your future project for monetizing the autonomous car driving initiative? Thank you. Robin Yanhong Li - Baidu, Inc.: Thank you for the question. That's a terrific question. As a matter of fact, I can tell you, my goal for project Apollo is to expand our monetization opportunities ahead, a real plausible path towards future economic value creation for Baidu. Specifically, let me give you the thumbnail of what Apollo is and comment on the business opportunities. First of all, as I described, it's open and compete in the reliable platforms. So we're open code, we're open software and then we're also open capabilities that through APIs. And we're also providing core services as the overall part of the platforms. The overarching design is any players in the auto industry with Apollo, you can put together the complete vehicle using off the shelf hardware components, and be able to run with different intelligent driving scenarios, and all the way up until 2020, towards fully autonomous driving. So that's the overarching vision by design. It's open innovation ecosystem. The key here is design point of that ecosystem, because the epic innovation center for the auto industry will be in data, in algorithms, in rapid pace of innovations towards intelligent driving. And Apollo is designed in that way, and I can tell you my personal experience, the Hadoop ecosystem, the core base come from my Yahoo! teams. And I personally witnessed through if you picked the right design point for the industry, you can tap into the vast growth and emphasize vast growth a win-win with all partners, and yet at the same times enable Baidu to tap into the economic opportunities. Now without going into the specifics, what I can point to you is, there is known ways of monetizing open networks, whether it's services, packaged softwares, components, solutions, all these options are available to Baidu to tap into. That's number one. Number two, the response from auto partners from industries has been, I could say, overwhelmingly positive, and our confidence of our ability to tap into the new rapid growth through the Apollo ecosystem and our ability to monetize is increased substantially, going forward. So it's a terrific question. Baidu not only want to enable a healthy ecosystem, but let's all make money in our way and grow the whole pie together.

Your next question comes from the line of Juan Lin from 86Research. Please go ahead. Juan Lin - 86Research Ltd.: Hi. Good morning, Robin, Jennifer, Dr. Lu, and congratulations Jennifer on the new role. I have a question on the mobile gaming business. You mentioned that revenue contribution of mobile gaming business is around 3% of total revenue. I'm wondering what is the contribution to our profit. And after disconnecting this business, are you going to monetize the mobile game related traffic, which was previously directed to the mobile gaming business? Do you think that disconnecting business will eventually lead to a more efficient usage of your traffic in terms of monetization? Thank you. Jennifer Xinzhe Li - Baidu, Inc.: Hi. Mobile game, yes, as I said earlier, it contributed close to 3% of revenue last year. The game business operate, as you can see, is relatively small in our overall picture, and it doesn't generate the kind of margin as we do from our main business. So this transaction is actually a very good transaction for both us and the parties involved, and also it brings some good level of gains for us. For us, mobile game sector is always a very attractive sector for advertising business. And we do expect that even in the past, with mobile game operations, we have game advertising income and going forward, we will continue to develop this market and grow the mobile game advertiser base.

Your next question comes from the line of Natalie Wu from CICC. Please go ahead. Natalie Wu - CICC: Hi. Good morning, management. Thanks for taking my question. Firstly, I want to extend my best regards to Jennifer on her new role. And my question is regarding the margin of the Core business excluding Transaction Service and iQiyi, which seems to be declined quite a lot in the first quarter despite savings from traffic acquisition costs. So just wondering is it mainly due to the AI-related investment, or is there any other factors behind that? And how should we look at the trend going forward? And also just a little bit clarification on the mobile game, so that the consolidation of mobile game business will be since mid-May, right, so that is to say your current guidance is reflecting half quarter's consolidation of the game-related revenue? Jennifer Xinzhe Li - Baidu, Inc.: Thank you for the question. Yes, for Q1, I think a couple of factors to think about as you look at the margins for Core. Mainly for Core, a couple of things are going about. One is, we're still recovering from, for our search service from the last year's incident. It has not been fully recovered. We're on the good path, it's ramping up, it's performing as expected. The other thing is the investment related to feed. As I mentioned earlier, early stage in terms of monetization, but we are very focused on building feed as a very solid and good complementary product to our search service. Related to that, our bandwidth, depreciation, R&D, content cost and also channel distribution investment to help mobile Baidu be more prominent among the user base. So that's the other factor going in Q1. And the third element, as you mentioned, AI investment, you have seen R&D expense increased year-on-year. As I mentioned earlier, the incremental spend would all be related to AI initiatives. AI initiatives are an integral part of our core service. It build upon the core technology capabilities and infrastructure capabilities. So that's what's driving the Q1's margin performance. For your second question with regards to mobile games, yes, you are correct. So basically, as I mentioned earlier, mobile game contributed to Q1 overall financial performance, it will only have about half of that in the Q2 period. Qi Lu - Baidu, Inc.: So, Jennifer, what I would just add to emphasize the AI investment part, the placeholder (53:03) I would like to emphasize is, we will be very disciplined and systematically optimize our resource allocations to make sure that our engineering investments and R&D investment is truly tap into the substantial growth opportunities ahead of us. And we're going through lot of work across different teams to make sure that our resource allocation utilization is fully optimized towards two fundamental focus. One is elevating our current core business, we see a lot of growth opportunities ahead, and at the same time accelerating the commercialization of AI-enabled business. So, being disciplined and being very systemically in optimization is very important to us.

Your next question comes from the line of Piyush Mubayi from Goldman Sachs. Please go ahead. Piyush Mubayi - Goldman Sachs (Asia) LLC: Thank you for taking my question. First, Jennifer, congratulations on your new role. We wish you the best in your future endeavors. My question is directed to Qi at this point. We recognized that Baidu is strongly positioned in AI R&D. As the business model evolves in the medium-term, could you give us a glimpse into the range of operating metrics that become relevant, so we can better understand and appreciate the new world we're getting into? And very specifically as we go into a face, voice, and image recognition based world that AI would bring about versus the current search monetization model in place, how do you think that's going to change? Thank you. Qi Lu - Baidu, Inc.: Well, thank you. Thank you for the questions. So, let me first comment on your first question with regard to operating metrics. First, myself, my teams are very, very focused on accelerating the commercialization of our AI-enabled new businesses, and because the core of AI technology is about efficiently extract knowledge from data, and our focus is first of all establish very, very compelling user scenarios, and users and usage are important part of metrics. And the second is the data and iteration (sic) [integration] (55:26) rate, how we can iterate (sic) [integrate] (55:28) based on the data that we have in our systems. And the third is rapidly explore business models and monetization capabilities. And adding up together, we are developing our overall operating frameworks and operating dashboards, these are the type of things, Jennifer, myself, our teams collectively look at every week, every months, and we're focusing on driving a disciplined and accelerated pace of execution on commercializing the AI initiative, AI-enabled new business initiatives. As I mentioned in my prepared speech earlier, as we move forward when appropriate, we will shed more light with the investor communities about those operating metrics, because it would take time to evolve, but what I can show you is our teams are staying very, very focused to be very disciplined and rigorous in accelerating our pace forward. With regard to your question about modality change, on the consumer side, our current view is that will not fundamentally affect the economic patterns, because even if you use voice instead of using keyboards, you still express your intent, and once we understand user intent, and we understand the content that users try to seek to access, we will be able to place match that in a good way, and existing models of advertising or other forms will be equally applicable in that scenario. So, at this stage, we do not see a fundamental shift even though modality may change, the economic opportunity in front of us will be equally compelling as we have seen up to this point.

Your next question comes from the line of Karen Chan from Jefferies. Please go ahead. Karen Chan - Jefferies Hong Kong Ltd.: Thank you management for taking my question. Congratulations to Jennifer on your new role. My first question is related to Core margins. So it is negatively impacted partly by the initial ramp up of mobile news feed ad. So how should we think about normalized margin level once the mobile news feed app reach a certain scalability? And my second question is regarding our monetization timeline of DuerOS apps with the AI-enabled home device partnership we secured. Wondering if management can share any color on that? Thanks. Jennifer Xinzhe Li - Baidu, Inc.: Thanks, Karen. I'll take the first part and Qi can help address the second. As I mentioned earlier, currently the margin doesn't reflect a true picture. I think we mentioned earlier, feed is a product that's going to carry a different margin profile. But overall, I think just purely focusing on margins is just one angle. It's more important to think about the overall service and revenue opportunities that we can generate because of the product of search. The core search continues to be a very fundamental need, and that business model is beautiful and scalable and high margin. First for feed to complement the search service, we give our advertisers a much bigger advertising inventory, and the advertisers, big or small, can have more budget allocated with us. So for us to think about feed because it is a push kind of product, it's different from search. The overall it's a mix, it's a more beautiful and more integrated, and richer service that we provide, and I think it's important to look at the bigger market value we can potentially tap. Qi Lu - Baidu, Inc.: Yeah. Let me comment on the second part of question with regard to DuerOS monetization and its timeline. And here is how we think about DuerOS, its position in the industry, and now we shed light on how we think about monetization. First of all, DuerOS is the AI generation user experience platform, very similar to iOS and Android. iOS, Android is really for fingers, the device sitting in everybody's pocket. DuerOS, the fundamental interaction is natural language and voice based and it's everywhere. It's on every device, in every scenario. So it's a platform in that regard. The second, DuerOS is also a new entry point, because as you use DuerOS more and more in your home, in your car, say, play the next song for me, order pizza that becomes a new entry. So it plays dual role as a experienced platform, a new form of entry. On the entry side, the monetization is very natural. This is very similar to today's information gateway, like search. And the timeline will be the amount of scale that we can grow into, and there will be natural opportunities we can tap into. The second is about the platforms. Traditionally, there are several dimension with platform economics. If you look at iOS and Android, there is ways to run a app store type models, you can get economical value. There is VIG for the applications that builds on top of the platforms, and at the same time DuerOS also strategically bring additional demand to our ABC cloud. So we can also indirectly monetize through that vehicles. So having said all of that, our focus right now is really grow the ecosystem. We're doing a good job. Our team is really racing ahead, every day, every week, we're signing up new partners. So our focus is on scale. But as I said, we see ourselves as a clear leader in China and the opportunities over time will be tremendous.

Your next question comes from the line of Grace Chen from Morgan Stanley. Please go ahead. Grace Chen - Morgan Stanley Taiwan Ltd.: Hello. Hi. Thank you for taking my question. The question is about the search business. From the Q2 sales guidance, we can see that the search sales should be recovering on both QoQ and then year-over-year basis. Can you help us understand what are the key drivers for the sales recovery in terms of market segments? And also can you comment on the competitive landscape, in the advertising business in general, for example, from like social and e-commerce peers? And also on the margin for search business, as we've just discussed that, we can see that margin have been contracting in the past two quarters for a couple of reasons. So with the sales recovery and margins recover (sic) [recovery] (62:06), so can you give us a guidance about the reasonable margin level of the search business? Thank you. Jennifer Xinzhe Li - Baidu, Inc.: I think for us, as you noted correctly, the business is recovering and rebuilding. The factors that we look at, many other factors have a lot of potential, specifically education, real estate, local services, like even retail continues to be very strong. I mentioned earlier also like the sectors like games, could be a lot of possibilities too. So as we look forward, search continues to have a lot of verticals that we can further develop and service our customers better, and with complementary feed products to service even bigger customer pools. I think for us to look at the overall business performance, it's our focus to run a highly efficient business. We have always steered our resources towards strategically important areas. As we identified AI as our key strategic focus, a lot of the effort is focusing on the R&D side, in particular, related to talent. So as I mentioned, if you look at the margin performance for the year, I have given a pretty clear indication in terms of how you look at our overall business. Basically this year, I think for us, we've talked about content that's related to iQiyi and our overall ecosystem build up. I talked about R&D that's related to talent, specifically for AI. And I think these are the main items and the rest of us is to focus on execution. No specific margin guidance, but I think I hope the information we provided is helpful for you to construct your margin picture. Qi Lu - Baidu, Inc.: With regard to competitions, what I will emphasize is, first, we are clearly the market leaders, particularly in search market share on mobiles, and that's number one. Number two, our focus is on innovations, our focus on expanding the search scenarios, particularly expand search capability, so that search experience is fundamentally natural to a mobile device and tap into the rich capabilities such as camera and speech, so that over times we will be more compelling. And last, I will say is search at its core is a scaling business. There is a fundamental scaling impact. As market leaders, we want to fully leverage that, so that our technological capabilities with the new AI at the core will understand user better than any other, and understand content better than any others. So over time, we are confident that we will be able to maintain a strong market leadership position. Robin Yanhong Li - Baidu, Inc.: So let me just add on the search revenue side. I think the search business has been a very traffic bound business. Advertisers or customers they all want to buy more traffic, and the performance is unmatched by any other type of media online or offline. So our focus has been and will continue to be on growing the search traffic, so we're not worried about other type of advertisement from other type of media.

Your next question comes from the line of Ming Xu from UBS. Please go ahead. Ming Xu - UBS Securities (Asia) Ltd.: Good morning. Thank you for taking my question. So I have two questions. The first one is on the news feed side. So, if you name one key area to improve on the user experience of news feed, so I'm wondering whether it's – what is that, whether it's recommendation algorithm or targeting or content or something others. Could you help us understand. And secondly, my second question is on CPC. I think from 20-F, we know that last year, the number of paid clicks actually (66:45) more quickly than revenue growth indicating that the CPC is actually down. So you just mentioned that this year the paid clicks will continue to grow. So could you also comment on the CPC trend? Thanks. Qi Lu - Baidu, Inc.: Let me first talk about the feed side, good question. If there is one thing for us to focus is the quality of the matching algorithms, because the search product fundamentally is about deeply understand a user, the user's interest, the information needs, on the other hand understand the content, but that's core is about matching them together. So the areas for us to focus on or the top priority areas is the quality of the matching algorithm, so that we can sustainably improve the overall user satisfaction and grow the base of that product. Jennifer Xinzhe Li - Baidu, Inc.: And on your second question, yes, last year – if you recall, last year, we took effort to have a higher standard for our customers. And as a result, a lot of the customers are removed or unable to do business with us. For search, it is a bidding business model, when you have less like a smaller advertiser pool, the bidding will not be as intense. So that in itself can affect the CPC. However, looking at the paid click trend, you will notice that for this kind of phenomenon to occur, our advertisers are actually having better ROIs for the business. It continues to speak to this high performance nature of paid search and it's just a matter of transition now we're going through that CPC was a result of that, but that's not something that I feel should be worrisome.

Your next question comes from the line of Evan Zhou from Credit Suisse. Please go ahead. Evan Zhou - Credit Suisse (Hong Kong) Ltd.: Hi, Jennifer. Thank you for taking my questions. Just lastly, I wanted to ask an update about Baidu Financial Services, wondering whether this is actually becoming more of a visible or higher contribution portion within the other revenue being recognized in the first quarter, and how is the kind of profitability improvement within this segment for our business, because we have also seen some across industry, the overall growth, and profitability has improved a lot in the past few months. So I wonder if I can get an update on that. Thank you. Jennifer Xinzhe Li - Baidu, Inc.: Yeah. For our Financial Services business, it does generate financing income, and that would flow through other revenue. It's still in its early stage, and having us building the fundamental capability like leveraging data and algorithm to have better modeling for credit risk underwriting would be the focus. So if you would see that we position our Financial Services business as a Fintech business, and we do originations and wealth management to help train our models, and so that we can really get better handling of the much richer data that we have and the technology capability. So Financial Services itself as effort is progressing very well, and I think it's on the path of getting more stronger fundamental capability in helping using the technology and a different angle to look at the Financial Services business.

Ladies and gentlemen, we are now approaching the end of the conference call. Thank you for your participation in today's conference. You may now disconnect. Goodbye.