Expedia Inc. said Friday that it sold its majority stake in
eLong Inc., amid growing losses at the Chinese mobile and online
travel service that have weighed on Expedia's profit.
Expedia's 62.4% stake was sold for $671 million to a group of
buyers including Ctrip.com International Ltd., Keystone Lodging
Holdings Ltd., Plateno Group Ltd. and Luxuriant Holdings Ltd.
Shanghai-based Ctrip said in a separate news release that it has
acquired a 37.6% equity stake in eLong for a total purchase price
of approximately $400 million.
Expedia's involvement with eLong dates back to 2005, when
Expedia's then-parent IAC/InterActiveCorp. took a controlling
interest in the Chinese company. Over the last decade Expedia
boosted its stake to the 62.4% it sold Friday.
Last July, rumors swirled that Expedia planned to sell its stake
in eLong to Ctrip, which the Bellevue, Wash., travel site at the
time dismissed.
In its most recent quarter, Expedia warned that spending would
continue to grow at eLong, where losses have widened as the website
spends more on sales staff, marketing and discounts to lure
travelers in the world's most populous nation. Expedia's
first-quarter profit fell 31%, in part thanks to eLong.
Meanwhile, the acquisitive company has been amassing brands in
an effort to add new customers. Competition in the space has
intensified from new rivals including Google Inc. and Airbnb Inc.,
and as hotels cut commissions, they pay to booking sites. Expedia
and rival Orbitz Worldwide Inc. in February agreed to a $1.3
billion tie-up that would bring many of the top U.S. travel-booking
sites under one roof. Earlier this year, Expedia bought smaller
rival Travelocity for $280 million.
Other deals over the past year include Australian online travel
agency Wotif.com Holdings Ltd. and European online car-rental
reservation company Auto Escape Group.
Expedia shares were inactive in pre-market trading. Shares in
Ctrip rose 1.1%.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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