Question-and-Answer Session
Operator
Your first question comes from Dick Wei – JP Morgan.
Dick Wei – JP Morgan
Good morning, Robin and Shawn. A question regarding some of the news on the Internet data center shutdowns in September and October timeframe.
I am wonder if you could quantify if they are any impact on your Baidu Internet traffic and as well as how long do you think those impacts are going to last? The last part of it is, how much impact is factored in your guidance for this quarter?
Robin Li
Yes, there were some shutdowns in some of the data centers during September and October, but it is a little hard for us to quantify the damage that it caused to us. It’s not only affected the Union traffic it also actually affect our organic traffic because when you have some web sites unreachable it will actually discourage people from searching on the Internet.
Our traffic is decided by a very sophisticated number of factors, so it is very hard for us to quantify. I wouldn’t say that it will cause any material impact on our revenue in Q3 and our guidance in Q4.
Dick Wei – JP Morgan
Thanks Robin.
Operator
Your next question comes from Anthony Noto - Goldman Sachs.
Megan Barker for Anthony Noto – Goldman Sachs
Hi, it’s Megan Barker on for Anthony. You spent $6.5 million on the Japan Initiative so far this year. I think the original plan was for about $15 million. Can you just discuss how we should be thinking about that for the fourth quarter and then into 2008?
Also just a quick housekeeping question, how should we be thinking of the tax rate going forward? Thanks.
Shawn Wang
On the Japan initiative, I think when we’ve provided our guidance, saying that in the first year we expect to have the P&L impact of up to $15 million for the first year of our initiative in Japan. Three quarters went by, we have incurred slightly less than $7 million up to now, but we are looking to launch our products and services in the last quarter, so we would expect a bigger increase in the fourth quarter.
As this is only the beginning of the fourth quarter, our actual launching plan is being finalized, so I can’t give you an exact quantity. However, I will stay with the statement that our first year expenses related to Japan will be still up to $15 million.
- To read the full transcript on Seeking Alpha, click here »
