Expedia Buying Out RenRen To Grab More Of Chinese Travel's eLong
Expedia is buying Chinese social network Renren out of its stake in global travel site eLong. — Expedia first invested in eLong in 2004 has owned a majority of the site since May, when it bought an eight percent stake for $41.2 million …
Context & Ripple Effects
This closes out a slow build: Expedia first invested in eLong back in 2004, then moved to majority ownership in May 2011 by paying $41.2 million for an eight percent stake. Buying out Renren removes the last outside shareholder named in the deal, converting a shared holding into direct control.
For Renren, the exit comes just months after its New York Stock Exchange debut in May 2011, which raised $743 million and briefly pushed the stock to $24. Selling a minority travel asset so soon after listing reads as a young public company pruning non-core holdings. It also fits Expedia's broader 2011 reshaping — the April plan to split TripAdvisor into its own publicly traded company and the January removal of American Airlines' fares from Expedia.com both point to a parent actively redrawing its portfolio.
First-order effects
- Expedia gains unshared control of eLong, letting it steer the Chinese site's strategy without negotiating with Renren, while Renren banks cash from a non-core asset within months of its IPO.
Second-order effects
- Chinese online travel rivals now face an eLong answerable solely to a well-capitalized US parent, raising the competitive bar in a market where Expedia has held a position since 2004.
Third-order effects
- If the pattern holds, Western online travel groups will consolidate China exposure through outright buyouts of local players rather than passive minority stakes — and newly US-listed Chinese consumer companies will keep shedding side assets to focus their stories for investors.
The trend: Global online travel is consolidating around direct equity control of national market leaders, with Expedia preferring buyouts over partnership stakes to anchor its China position.