Chinese online travel service provider eLong Inc. reported its unaudited financial results for the first quarter ended March 31, 2011, and said Tencent made a strategic investment in the company.

Chinese online gaming and instant messaging firm Tencent Holding Limited yesterday made a strategic investment in eLong, acquiring approximately 11 million newly-issued shares for USD84 million. The strategic investment in eLong represents the first significant investment in the travel market by Tencent.

On the same day, Expedia, eLong.com's controlling shareholder, purchased 5.4 million newly-issued shares for USD41 million. eLong says it intends to use the proceeds from the sale of the newly-issued shares for acquisitions, business development, working capital and other general company purposes.

"Tencent is focused on creating value for our users, and we believe this partnership will bring our users innovative and quality services that combine our community leadership and marketing know-how with eLong's online travel expertise and unmatched supply portfolio. Through the implementation of open platform, we will continue to enhance our service offering to users by exploring the synergies between their online activities and offline lifestyle," said Martin Lau Chi-ping, president of Tencent Holdings Ltd.

Net revenues for eLong for the first quarter increased 23% to CNY124.5 million, compared to CNY101.1 million in the first quarter of 2010. Net income for the first quarter increased 30% to CNY7.7 million, compared to CNY5.9 million in the first quarter of 2010.

Hotel room nights booked through eLong in the first quarter increased 41% to 1.7 million room nights compared to 1.2 million in the prior year period.

Income from operations for the first quarter increased 111% to CNY13.2 million, compared to CNY6.3 million in the prior year period. Operating margin was 10.6% compared to 6.2% in the first quarter of 2010.