Chinese Internet-search giant Baidu.com Inc. (NASDAQ:BIDU) holds 64.4% of China's search-engine market by revenue and has a market capitalization of $8.7 billion. (Source: Analysys International).

The company, often called the "Google of China", goes by the adage that it “respects the truth, and our search results reflect that commitment."

However, Baidu came under fire over the tainted milk scandal currently rocking China. To recap: China's government confirmed that contamination of baby formula with melamine, an industrial chemical, caused the deaths of four infants and illnesses of 6,200.

Baidu was approached by several dairy producers but "flat out refused" to screen out unfavorable news. The Beijing-based company repeatedly denied speculation online that it censored information. There is no proof that Baidu played a part in concealing the discovery.

To avoid any more confusion in the future, it would be wise for Baidu to copy the business practice of Google and place paid search result outside of its main search listings. This prevents any hint of conflict of interest. Currently, Baidu allows its advertisers to pay their way up to higher positions within search results.

Unlike Badiu, Google Inc., places paid search results outside of the main search listings. "Google is under much more international scrutiny than Baidu," said Mark Natkin, managing director of Marbridge Consulting, a Beijing-based Internet and technology firm. "In terms of market practices, Baidu can definitely take more liberties."

Baidu already added a small two-character tag to identify the ads at users’ requests. It doesn't use a different background color yet as Google does to distinguish paid ads.

Baidu is a forward-looking company and recently announced that it will include business-to-business and business-to-consumer sites in its offering that will directly compete with Alibaba.com. Its announced online-auction site will compete with Taobao, while its announced online-payment system will compete with Alibaba's Alipay system.

Robin Li, Baidu founder, chairman and chief executive, has good reason to stay confident in his company. Baidu is flexible enough to learn lessons and adapt to new business realities.