BAIDU.COM has been the star of China’s Internet world. But now the search engine, dubbed “China’s Google,” is scrambling to rescue its reputation after State TV accused it of letting unlicensed suppliers of medical products pay for higher rankings on its results page, without alerting users.

Baidu.com Inc.’s U.S. shares have plunged this week, including a 30-percent drop Monday, since the weekend TV report. Baidu says it has suspended thousands of merchants from its paid-search service but says it broke no law.

It is a rare setback for Baidu, which enjoyed a long winning streak after its 2002 launch, with profits up 91 percent in the latest quarter and a 60 percent market share, far ahead of Google Inc.’s Chinese site.

CEO Robin Li said Baidu is trying to reassure users by requiring customers selling medical, beauty and health food products to show they are licensed in their fields before they can return to the paid-search service. But he stressed that was not required by law and said search engines could not be expected to vouch for information on the Internet.

“We are doing this because we care. It is important to us. We want to be a responsible corporate citizen,” Li said Thursday in a conference call with financial analysts. Still, he said, “if I had to speculate, our traffic will be negatively affected in the short term.”

Little-known outside China, Baidu is one of the world’s most-visited Web sites because of its dominance among China’s vast population of 253 million Internet users.

Over the weekend, China Central Television (CCTV) said Baidu’s paid-search service, which lets Web sites pay to be listed higher among search results, allowed links to unlicensed companies that offered medical products or services. CCTV said the sites sold treatments for cancer, sexually transmitted diseases and other ailments. (SD-Agencies)