Together with Expedia, eLong’s controlling shareholder, it has bought into the Chinese Online Travel Agency and now becomes its second largest shareholder.

Tencent has acquired approximately 16% of the outstanding shares for a total purchase price of $84.4 million. Expedia has acquired approximately 8% of the outstanding shares for $41.2 million and now holds 56% of the outstanding shares.

eLong and Tencent plan to deepen their cooperation in the future, including forming a business partnership to develop online travel products and distribute eLong’s hotel supply to Tencent’s online community of 674 million active user accounts in China.

eLong’s hotel supply portfolio now covers over 150,000 hotel properties worldwide, including more than 19,000 hotels in China, and more than 130,000 internationally through its seamless connection with Expedia.

“We at eLong could not be more excited about working with China’s online market leader to develop new travel offerings and give more Internet users access to the largest global selection of hotels in the world,” said Guangfu Cui, CEO of eLong.

“Given Tencent’s user base and its reach across multiple platforms, including portal, mobile, instant messaging and social networking, we believe consumers throughout China will benefit from this partnership, while eLong and Expedia supply partners will enjoy incremental access to significant internet traffic and customers in China.”

“Tencent is focused on creating value for our users. We believe this partnership will combine our online platforms with eLong’s online travel expertise to bring innovative and quality online travel services to our users.

“Through the implementation of our open platform strategy, we will continue to enhance our service offering to fulfill users’ various lifestyle needs online,” said Martin Lau, President of Tencent Holdings Limited.

“China is a key region for us from a strategic perspective,” said Dara Khosrowshahi, president and CEO of Expedia, Inc. “Aligning ourselves with the online industry leader in China, and increasing our own investment in eLong, strengthens our position in this critical market, and will allow eLong to strengthen its outstanding online hotel services and provide air and hotel products to more and more customers in China.”

This is Expedia’s second strategic move in Asia in the last few months, after its joint venture partnership with AirAsia announced recently.