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Baidu buying stake in group-buying co. for $160M

NEW YORK (AP) -- Baidu is paying $160 million for a majority stake in the Groupon-like unit of China's online social network operator Renren Inc., as it looks to keep pace with consumers' increasing shift to smartphones and tablets.

Baidu Inc., China's biggest search engine operator, is taking a roughly 59 percent stake in Nuomi Holdings Inc., which offers group-buying and local information services in China. Nuomi had 3.8 million active paying users as of the second quarter and about $120 million in general merchandise sales, with 30 percent of sales coming from mobile devices.

The deal is expected to close in the fourth quarter.

Last month Baidu reported a drop in its second-quarter profit as it dealt with higher costs and a big tax bill. The company, which had focused mostly on computer-based services, is now trying hard to keep up with consumers' increasing preference to do their Web-based searches on smartphones and tablets.

Shares of Baidu fell 94 cents to $138.60 in morning trading, while Renren's stock added 19 cents, or 5.6 percent, to $3.59.