Jan. 2 (Bloomberg) -- Baidu.com Inc., owner of China's most- popular Internet search site, says the company's shares may fall in the ``short term'' after the death of former chief financial officer Shawn Wang, because of uncertainty about his replacement.

``Under Shawn, we have built up a mature and transparent finance system,'' Sun Yao, Baidu spokeswoman, said in Beijing in a phone interview. ``The market will show a negative reaction over the short term, but not in the long term.''

Wang died on Dec. 27 ``in an accident in China during the Christmas holiday vacation,'' Baidu said in a press release. The Wang family asked that details about circumstances around his death not be released to the media, the Beijing-based company said. Baidu shares have fallen 4.7 percent in the two trading days since the death was announced, after rising for seven straight days.

``The news added to uncertainty for the company in the near term as they seek a replacement,'' Dick Wei, an analyst at JPMorgan Securities Inc., said by phone from Hong Kong. ``For the longer term, we believe the business impact is not significant because it's a leading technology company.'' Wei kept his ``overweight'' rating on the stock, with a 12-month target price of $400.

Baidu declined $9.07, or 2.3 percent, to $389.80 in New York trading on Dec. 31. The stock more than tripled in 2007, and was the biggest gainer in the Nasdaq 100 Index. Baidu is the only Chinese company in the index, which consists of the 100 biggest non-financial companies by market value listed on the Nasdaq.

China Share

The company's share of the Chinese Internet search market rose to 61 percent in the third quarter from 58 percent in the second, while its closest rival, U.S.-based Google Inc., increased its share to 24 percent from 23 percent, Beijing-based researcher Analysys International said.

China was home to 162 million Internet users at the end of June 2007, second only to the U.S., according to the government- backed China Network Information Center. That was the most recent data provided by the government. The nation may surpass the U.S. this year, according to Liu Bin, an Internet analyst at Beijing- based research company BDA China Ltd.

Sun didn't say when the company expects to find a replacement for Wang.

``The senior management and our finance team will share Shawn's work, until we find a successor to take over his job,'' she said.

JPMorgan's Wei said he expects Shen Haoyu, Baidu's vice president of business operations to oversee the company's financial operations until a replacement is found.

To contact the reporter on this story: Zhao Yidi in Beijing at at yzhao7@bloomberg.net or Chinmei Sung in Taipei at csung4@bloomberg.net.

Last Updated: January 2, 2008 02:10 EST