Art dragon should be with whom "together"?

DoNews July 10 (Reporter Xiang Mi) Procter & Gamble acquired 65% stake in eLong rumors came out, eLong shares rose sharply. Although this argument was the first time eLong Expedia executives rumor, but its "inaccurate" argument, did not completely deny the acquisition.

Another anecdotal evidence said that Ctrip will be trading with Expedia, the latter will hold the hands of its eLong, cool information and to the network most of the equity "package", sold to Ctrip.

Although up to now, the above two statements have not been officially confirmed, but anecdotal evidence of art dragon appeared again and again, no matter what the transaction was reached, eLong was sold out a foregone conclusion.

Yi Long's beast fighting animal

In 2004, Expedia, an online travel company, entered the eLong as a pawn of online travel in China and hoped to snatch the package with its cool website and its website.

At the same time, as a professional manager of Cui Guangfu joined eLong, a series of focus on hotel reservations strategy, eLong made online travel between 2010 and 2012 a can not be ignored business.

At that time, eLong had three consecutive quarterly earnings. Cui Guangfu seemed to pull the eLong deep in the dilemma back into the path of rising profits and possessed the strength and capital to Ctrip's hotel business.

But the good news is not long. With Ctrip's strategic adjustment and the strong return of founder Liang Jianzhang, the two sides started to make short breaks in the hotel business and the price war to gain market share at the expense of profits intensified.

As part of the price war, eLong has introduced thousands of hotel clients each day to provide additional discounts of up to 30% -50%, as well as a 10% discount for its 200,000 international hotels for two consecutive years.

This promotion led directly to eLong "increase income does not increase profits": As of the third quarter of 2013, eLong has been a loss for five consecutive quarters, only the loss in 2013 exceeded 100 million yuan, eLong also since 2013 Realize the first annual loss in five years.

Into 2014, eLong has not stopped the loss of decline. Its latest earnings data showed net loss for the first quarter of 35.4 million yuan, compared with net profit of 2.8 million yuan a year earlier.

Wei Changren, chief counsel of the brigade consultancy, said that according to the development status of elon in the past two years, its development prospect is not clear, and it is more difficult to change the status quo by relying on its own strategic adjustment.

At the same time, Wei Changren also pointed out that in the face of consecutive losses of eLong, Expedia seems to have lost confidence in eLong and will also consider ways to be able to maximize its own interests in the Chinese market, of which eLong is at Passive, and not much voice.

"From an Expedia point of view, it is in the interest of all parties to come together with Ctrip and Ali, or to sell eLong."

Who will marry eLong?

So far, the acquisition of eLong about the gossip, known actor candidates include Ctrip, where to go and Alibaba and other giants. It is not yet known exactly who can achieve good or bad.

However, the industry believes that eLong has repeatedly through the hotel business price war, laid the leading position in the hotel business, for several "gossip boyfriend", from a strategic or operational level, the acquisition of eLong have more Great value.

First of all, Alibaba's Taobao travel has been committed to building an online travel platform, but the hotel business has always been one of its shortcomings. If Alibaba can receive the dragon eLong, hotel resources and travel can complement each other, is conducive to the layout of the hotel business.

Second, in recent years, they are reluctant to do only vertical travel search and look forward to the transformation of OTA where to network, but also strive to expand their hotel business, the acquisition of eLong can also complement the hotel business.

Regardless of business considerations, from a strategic perspective, where the network is even more looking forward to this acquisition to enhance its voice in the hotel reservations, so as to achieve and Ctrip challenge Ctrip's purpose.

Although Ctrip, the most likely acquirer, has been steadily positioning itself for many years as an OTA boss, it still hopes to expand its business territory through continuous acquisitions so as to achieve its goal of deterring competitors.

"As Ctrip and eLong's high degree of overlap of business, a simple business added meaning is not large, more lies in the strategic layout: where to long-term network has the intention to challenge Ctrip boss position, if it is where to go online acquisition, then Is the first city in the competition for the first throne, and may become the inflection point of the OTA pattern, so Ctrip if you want to win the eLong, the main purpose is to snipe where to network in order to consolidate the OTA first place.

The general perception from the capital markets is that once the acquisition is rumored, Expedia in the Chinese market can mitigate the troubles caused by the loss of Elong's performance; and finally, Elongated due to price wars And Ctrip truce, continue to make hotel reservations business; Ctrip will also quickly strengthen the hotel reservation market monopoly.

With the rumored fermentation, eLong shares rose more than 60% in recent two weeks, Ctrip shares also rose to 64.91 US dollars. Insiders said that in view of the recent sharp fluctuations in the price of artilong, is expected by the end of July or early August, eLong where will be clear. (Finish)