Expedia is investing $41 million in eLong, the second biggest online travel company in China, as part of an effort for the Bellevue company to get a bigger foothold in the country. Expedia had already owned a portion of the 12-year-old company, and with the latest investment it now owns a 56 percent share. In addition to Expedia, Chinese Internet company Tencent — with 674 million active monthly users — said that it was buying 16 percent of the company for $84.4 million.

“China is a key region for us from a strategic perspective,” said Dara Khosrowshahi, president and CEO of Expedia in a press release. “Aligning ourselves with the online industry leader in China, and increasing our own investment in eLong, strengthens our position in this critical market, and will allow eLong to strengthen its outstanding online hotel services and provide air and hotel products to more and more customers in China.”

During the first quarter of 2011, approximately 39 percent of Expedia’s worldwide gross bookings and 40 percent of worldwide revenue came from international markets.

Last year, The Wall Street Journal reported that Expedia planned to spend upwards of $50 million in China by 2013

Comments

  • Victor

    I travel to China quite a bit, and I have booked flights and hotels using both eLong and the dominate player Ctrip. I must say eLong is falling further and further behind, both in its offerings and customer service. There is a darn good reason why Ctrip is 8 times bigger than eLong. This sounds more like a double down to me.

  • Jonathan Alford

    eLong has been a challenge for Expedia for years, and patience is certainly a virtue while seeing Ctrip hold 40x – 80x multiples, but aligning with Tencent is potentially a strong move and will certainly be interesting to watch. 

    • Victor

      If you actually get to experience eLong vs. Ctrip’s services, you will know instantly the difference. Ctrip’s customer service is simply outstanding, even by Seattle standards. This simply sets them apart in a country accustomed to lousy or no customer service. I don’t believe this is something more money or technology can make much of a difference in the short term. 

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