Tencent move increases Ctrip's grip on Internet travel business

Ctrip.com International Ltd is poised to strengthen its position as China's largest travel website after teaming up with Tencent Holdings Ltd to stave off competition.

The Shanghai-based company is the biggest shareholder in Elong Inc, an online trip-booking service, which earlier this month received an offer to take it private from Tencent, the e-commerce giant. Ctrip sees opportunities to "work closely" with Tencent to drive more online traffic to its travel site, Jane Sun, chief operating officer, said on a conference call with investors.

Tencent's bid for Beijing-based Elong may further improve Ctrip's position in China's growing leisure industry, Morgan Stanley analysts led by Amanda Chen wrote in a note last week. "People see the potential for Tencent and Ctrip to get closer together through their holdings in Elong," Jeff Papp, a senior analyst at Oberweis Asset Management Inc, which oversees about $1.9 billion, said.