Tencent - one of China's big three e-commerce businesses - has made an offer to take full ownership of eLong.
The announcement comes ten weeks or so after Expedia Inc sold its 62.4% stake in eLong to a group of investors for $671 million. Ctrip, China's biggest OTA, hoovered up 37.6% of its rival as part of the consortium.
Tencent currently owns around 15% of eLong when measured in terms of its voting power.
The Chinese internet and e-commerce sector is dominated by BAT - Baidu, Alibaba and Tencent. The potential takeover of eLong gives Tencent ownership of a pure-play online travel business comparable to Baidu's majority ownership of China's second biggest OTA Qunar, and Alibaba's standalone travel unit Alitrip.
eLong has also issued its second quarter earnings today in a separate filing from the Tencent takeover. When asked on the earnings call about the Tencent offer, CEO Hao Jiang said they only received the offer yesterday and that it was being considered.
But Jiang did say in the Q2 filings statement that eLong will become a mobile -focussed accommodation company.
And potentially being owned by Tencent, which owns mobile marketing platform WeChat, could give it a significant leg up in achieving this aim.
Mobile was highlighted in eLong's financials, with more than 75% of room nights booked in the quarter coming through the mobile channel. Total room nights booked was 11.4 million - up 36% year-on-year - although revenues dropped by 22% because of aggressive couponing and lower commissions generally.
Cumulative downloads of its various apps reached 290 million at the end of the quarter.
And eLong is already pretty much a hotels business already, with accommodation accounting for 85% of the total revenues. It has also increased the number of Chinese properties available to 290,00 at the end of the quarter, up from 120,000 at the same time last year.
The accommodation side of eLong also includes a B2B hotel IT platform for hotels, which now has more than 50,000 properties signed up.
Transportation tickets told a similar story to accommodation. Volumes were up by 89% compared with the same time last year but revenue was down 30% as airlines dropped commission levels to 0%.
This meant that its net loss for the quarter came in at RMB356.4 million ($57 million), compared to net income of RMB31.5 million ($5 million) a year ago.
Meanwhile, Qunar has just issued a statement itself, claiming that is now "the largest mobile hotel distribution platform in China in terms of volume of hotel rooms."
It is also claiming "a single-day record for hotel room nights stayed booked through Qunar, with on average more than 300,000 daily hotel room nights stayed in peak days in the week of July 27th."
Qunar's Q2s have yet to be scheduled.
See also:
Tnooz analysis of a Macquarie Research paper outlining the potential growth still to come in China's online travel.