China's Internet search leader Baidu said on Friday it will overhaul operations due to the fact that state media said it allowed unlicensed medical services to buy high search rankings to win more customers. According to The Guardian, this has resulted in Baidu’s ad revenue dropping ten to fifteen percent, plus the release of several ad representatives who have allegedly helped these false medical practices gain top ranking in Baidu.

Robin Li, Baidu's chief executive, told the state news agency Xinhua today that the firm had sacked staff and more could follow. For instance: "We have removed the key words of all four clients mentioned in the report and have begun to double-check the licences of all other hospitals and pharmacies on our client list."

Moreover, according to Li, the company will soon launch a new advertising system that will offer more information about the companies to people using the search engine. He said that the new system was called "Phoenix Nest," and that it was meant to offer better search result rankings, but did not elaborate further on how it would operate.

However it's unclear how long Baidu has been allowing these companies to buy their way into high-ranking search results, but Chinese citizens had apparently been purchasing products from them for at least the last month. For example, according to China's Xinhua news agency, one citizen complained that he had spent over 10,000 yuan (roughly US$1,465) at a "top-ranking clinic" he found on Baidu, only to have his symptoms persist.

Baidu leads the Chinese web search and advertising market by a big margin, with an estimated two-thirds of the audience in the world's most populous market. Baidu receives more than 100 million clicks daily.