eLong, Inc. (NASDAQ: LONG) is a leading online travel service provider in China. It utilizes a centralized modern call center and web-based distribution technologies to provide its services. It seeks to serve China's emerging class of frequent independent travelers, or FITs, who engage in business and leisure travel. eLong believes FITs to be a fast-growing, yet relatively underserved, segment of the RMB684.0 billion (US$82.6 billion) travel market in China. Through its nationwide 24-hour toll-free call center, its user-friendly Chinese and English language websites and its extensive reseller network, eLong, Inc. provides its customers with consolidated travel information and the ability to book rooms at discounted rates at 4,500 plus hotels in more than 330 cities across China. The majority of its hotel suppliers are three-, four- or five-star hotels, as rated by the China National Tourism Bureau, catering to higher-end travelers. It also offers convenient airticketing services.

Since its inception in April 2001, eLong, Inc. has built one of the largest travel service distribution networks in China. It offers its customers a wide selection of hotel rooms in all major cities in China, usually at significant discounts to published rates, and guaranteed year round room availability at many hotels. Its hotel booking volume has increased significantly from 2001 to 2005. It offers its travel suppliers access to aggregated consumer demand, giving them the ability to promote their hotels and other travel related services to a large and growing base of customers at low incremental cost.

eLong, Inc. also sells air tickets for all major airlines in China and many international airlines that operate flights originating from China. It issues and delivers air tickets using a network of local agents throughout 70 major cities in China. It provides air-ticketing service through its toll-free call center and websites. (website)

Through its beneficial ownership of our ordinary shares and our high-vote ordinary shares, as of May 31, 2011, Expedia controls approximately 81% of our voting power and has the power to control the election and appointment of our board of directors, thus we are a “controlled company” as defined in the Nasdaq Listing Rules. As a result, Expedia is generally able to exercise control over all matters requiring approval by our board of directors or our shareholders. Conflicts of interest may arise between Expedia or its affiliates and us, including corporate opportunities, potential acquisitions or transactions as well as other matters. For example, Expedia could prevent a sale of our company or cause the removal or replacement of any or all of our board of directors or senior executive officers, even if such actions would not be beneficial to our other shareholders. In addition, some of our directors may have interests in both us and in Expedia, which could cause them to have conflicts of interest.