Tuesday, November 14, 2006

Ctrip pulls away from eLong, Ctrip investing in execs and staff

eLong.com, has announced some great numbers for Q3 with a 40 percent year-on-year growth in revenues to US$9.4 million. The bulk of this ($7.3mm) still coming from hotel commissions but air commissions are growing faster than hotels (47% vs 38%). Congrats to the company on a quarter of positive operating income ($215k) and I look forward to hearing what new chair Barney Harford and newish CEO Tom SooHoo plan to do with some $142mm in the bank.

eLong's good results came a day after a mixed by investment heavy announcement from CTRIP. Sales were up more than 50% year on year to a very healthy $26+ mm, increasing the gap on eLong. However net profit and EPS were dead flat. The blame falls on "compensation expenses". In their formal announcement there a series of comments like
  • "Sales and marketing expenses...increased... due to hiring of new sales and marketing staffs"
  • "General and administrative expenses... increased...primarily due to the hiring of additional staffs"; and
  • "Product development expenses...increased...primarily due to hiring of additional product development staffs"
That is a lot of investment in a lot of staff.

The CTRIP and eLong battle is a look back in time at the battle between Travelocity and Expedia in 1999 and 2000 where Expedia took over Travelocity as the largest of the time. Though in the case it seems that CTRIP's lead is expanding and they are finding time to invest in people and product to go further. Am going to enjoy watching this battle.


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