Chinese online travel service firm eLong has sold its controlling stakes to US counterpart IAC/InterActiveCorp and will be merged into the latter's Asia Pacific operations.

The two companies said on Friday in Beijing that IAC Travel will invest US$60 million to buy 30 per cent of the stakes of eLong, one of the two biggest online travel service companies in China together with the NASDAQ-listed Ctrip.com International.

IAC also has a warrant to boost its stakes to 51 per cent.

"We foresee a broad range of opportunities to make eLong one of the leading travel companies in China with our technologies, expertise and resources," said Barney Hartford, president of IAC Travel's Asia Pacific operations.

IAC Travel operates IAC's travel assets and is the world's biggest online travel agency.

He said the growth potentials of the travel market in the world's most populous country is one of the major reasons that attracted the NASDAQ-listed US firm.

According to the World Travel and Tourism Council, the travel market in China will reach US$87 billion this year, which will grow to US$300 billion in 10 years.

Hartford said the travel market in China is extremely fragmented and the partnership with eLong could help the company adapt to the market quickly and better tap its potential.

Justin Tang, chairman and chief executive officer of the Chinese firm, said that with the help of IAC, eLong will accelerate its process towards becoming the biggest online travel service company in the country.

(China Daily July 31, 2004)