Profile: eLong, Inc. (LONG.O)

eLong, Inc. (eLong), incorporated on April 4, 2001, is an online travel service provider in China. The Company utilizes a centralized call center and Web-based distribution technologies to provide its services. Through its nationwide around-the-clock, toll-free call center, Chinese and English language Websites and its reseller network, eLong provides its customers with travel information and the ability to book rooms at discounted rates at over 7,000 hotels in over 400 cities across China and air ticket reservations in over 80 cities across China. Through Expedia, Inc. (Expedia) and its affiliates, the Company offers the ability to book rooms at 80,000 hotels outside of China. It offers customers content relevant to their hotel and air travel decisions, including tourist and event site destination information, hotel facility information, recent photos (including, for many properties, rotating 360 degree photos of hotel rooms and facilities), and customer reviews and comments.

During the year ended December 31, 2008, eLong derived 73% of its total revenue from its hotel reservation services. The Company acts primarily as an agent in its hotel-related transactions. It makes room reservations based on customer inquiries and, upon the completion of a customer’s stay, eLong calculates its commissions, which are generally a fixed percentage of the nightly hotel room rate, which is paid by the hotels to the Company on a monthly basis. eLong also confirms with the hotel the length of the customer’s stay. eLong provides around-the-clock air ticketing service, through its toll-free call center and Websites. The Company makes flight reservations through TravelSky, which is the operator of the nationwide system for air ticket reservations in China, and issue and deliver air tickets using branch offices of its subsidiaries and a network of local agents throughout cities in China.

The Company’s air-ticketing process begins when a customer initiates an inquiry through its call center, Websites or the call centers, employees or Websites of one of its partners. The customer is informed of the available flights based on their schedule and desired air carrier and the Company then confirms a booking for a seat on the selected flight. In cases where the air ticket needs to be issued outside of Beijing or locations where the Company does not have staff, the booking information is sent to one of its local agents in the city where the ticket is to be issued. eLong also uses local agents and other third party delivery companies to deliver tickets to its customers and collect payments for customers who have not prepaid with credit or debit cards. The Company then collects the airfare from the delivery company, pays the agent’s commission and the cost of the tickets, and retains the balance. In 2008, the Company sold approximately 1.79 million air tickets.

The Company competes with Ctrip.com.