Chinese Internet giant Tencent Holdings Ltd (騰訊) said yesterday it had become the second-largest shareholder in travel booking site eLong (藝龍), Expedia Inc’s Chinese unit, as part of its strategic investment drive.
Tencent — a gaming, search, instant messaging and social networking heavyweight — paid US$84.4 million to buy about 16 percent of eLong, China’s No. 2 online travel site, a joint statement by the three companies said.
Expedia, the world’s largest online travel company, which became the largest shareholder in NASDAQ-listed eLong in 2004, also increased its stake to 56 percent, buying an additional 8 percent of the firm for US$41.2 million.
“China is a key region for us from a strategic perspective,” Expedia president and chief executive Dara Khosrowshahi said in the statement. “Aligning ourselves with the online industry leader in China and increasing our own investment in eLong strengthens our position in this critical market,” he said.
Beijing-based eLong had a 7.3 percent share of the online travel market in the first quarter compared with its rival NASDAQ-listed Ctrip (攜程), which led the market with a 47.3 percent share, according to Shanghai-based iResearch.
The move marks the first major investment in the online travel market by Tencent, the companies said.
“Given Tencent’s user base and its reach across multiple platforms, including portal, mobile, instant messaging and social networking, we believe consumers throughout China will benefit from this partnership,” eLong CEO Cui Guangfu (崔廣福) said in the statement.
Tencent, based in Shenzhen, announced a plan in January to launch a 5 billion yuan (US$768.3 million) fund to invest in online gaming, e-commerce and new media companies.
The eLong purchase follows Tencent’s move last week to buy a 4.6 percent stake in Chinese film and TV producer Huayi Brothers Media (華誼兄弟) as part of its efforts to combine film and new media.
Tencent bought 27.8 million shares in Shenzhen-listed Huayi for about 450 million yuan, or 16 yuan each, according to a statement filed with the Shenzhen Stock Exchange by Huayi on May 10.
In Hong Kong, Tencent shares closed down 2.74 percent at HK$213.20.