IAC/InterActiveCorp (IACI) today announced that it has exercised a warrant to purchase approximately 17.4 million shares of high-vote ordinary stock of eLong (LONG) for an estimated cash purchase price of approximately $108 million.

The number of shares and purchase price are subject to adjustment following exercise pursuant to the terms of the related warrant agreement. IAC acquired the warrant in connection with its initial investment in eLong in August 2004, in which IAC invested $58.7 million.

Following the completion of this purchase, which is expected to occur in January 2005, IAC will own approximately 52% of the outstanding capital stock of eLong (on a fully diluted basis), representing approximately 96% of the total voting power of eLong. IAC's investment in eLong will continue to be managed by IAC Travel — Asia Pacific, a division of IAC Travel, and its financial results will be consolidated with those of IAC, as part of IAC Travel, following the completion of the purchase.

As a result of this exercise, IAC has the right to designate four additional members for appointment to eLong's Board of Directors. The four IAC designees appointed are: Mike Doyle, Chief Financial Officer, IAC Travel — Asia Pacific; Dermot Halpin, Managing Director, Expedia UK; Cameron Jones, Director, Hotels and Destination Services, IAC Travel — Asia Pacific; and Arthur Hoffman, Managing Director, Expedia Australia. Following these appointments, six of the 11 members of eLong's Board of Directors will be IAC designees.

"eLong is leading a dramatic transformation in the way that travel is planned and purchased in China," said Barney Harford, President, IAC Travel — Asia Pacific. "We are delighted to be deepening our relationship with eLong, and we are excited by the opportunity this provides us to embrace the growth potential of the Chinese travel market. China represents an $87 billion travel and tourism market opportunity today, forecast to grow to more than $300 billion by 2014."