eLong, Inc. Reports First Quarter 2007 Unaudited Financial Results

   BEIJING, May 15 /Xinhua-PRNewswire/ -- eLong, Inc.
(Nasdaq: LONG), a
leading online travel service provider in China, today
reported unaudited
financial results for the first quarter ended March 31,
2007.

    (Logo:
http://www.xprn.com.cn/xprn/sa/20061103193112-91.jpg )

    Business Highlights

    -- Travel revenue, comprised of hotel, air and other
travel product and
       service revenue, increased 22% to RMB63.0 million
for the first quarter
       2007 compared with the prior year period.
    -- Travel revenues by product line for the first
quarter of 2007 and 2006
       were as follows (figures in RMB 000's):


                                                          
              Y/Y
                                    Q1 2007  % Total  Q1
2006  % Total  Growth
    Hotel commissions                48,879    77.6% 
42,084   81.6%     16%
    Air ticketing commissions        12,050    19.1%  
8,009   15.5%     50%
    Other travel revenue              2,077     3.3%  
1,456    2.8%     43%
    Total travel revenue             63,006     100% 
51,549    100%     22%



    -- The Company recorded an operating loss of RMB5.2
million for the first
       quarter, a significant improvement from an operating
loss of RMB15.5
       million for the prior year quarter;
    -- The Company recorded a net loss of RMB0.8 million
for the first quarter,
       compared with a net loss of RMB12.2 million for the
prior year quarter;
       and
    -- As of March 31, 2007 cash and cash equivalents were
RMB1.18 billion,
       down 1% from RMB1.20 billion at December 31, 2006.
Cash balances
       decreased RMB14.6 million primarily due to the
unrealized foreign
       exchange loss of 9.6 million and capital
expenditures of 4.5 million.

    "eLong increased air ticketing commissions to
nearly 20% of our travel
revenue during the first quarter," said Henrik
Kjellberg, Chairman and interim
Chief Executive Officer of eLong, Inc. "We are pleased
with our progress in
diversifying the Company's revenues, as well as continued
efficiency gains
across our operating expense base, and remain confident in
the long-term
opportunity of China's online travel market."
    "eLong approaches the burgeoning Chinese travel
market from a solid
financial foundation," said Chris Chan, eLong's Chief
Financial Officer. "The
management team is committed to responsible growth, with an
aim toward
maximizing free cash flow over the long-term, while
increasing shareholder
return."

    Business Results
    Total and travel revenues both increased 22% for the
first quarter of 2007
compared with the prior year period, reflecting continued
growth in our core
hotel commissions business, as well by a 50% increase in
our air ticketing
commission business.

    Hotel
    Revenue from hotel commissions increased 16% primarily
due to higher room
volume, as well as a modest increase in commission per room
night. Room nights
booked through eLong increased 14% to 756,000, while
commission per room night
increased 3% to RMB65. Commission per room night increased
due to our hitting
higher room volume thresholds.
    eLong has grown its hotel offering over 22% since first
quarter 2006, and
now features discounted rates at nearly 4,000 hotels in
over 300 cities across
China.

    Air
    Revenue from air ticketing commissions increased 50%,
our highest rate of
growth in the recent three quarters. The increase in
revenue was volume driven,
with a 50% increase in air segments to 326,000. Revenue per
air ticket was
flat at RMB37.

    Profitability
    Gross margin in the first quarter was 72.9%, a decrease
of 247 basis
points compared with 75.4% in the prior year period. Gross
margin decreased
due to the increased mix of lower gross margin air revenue,
as well as
increased compensation expense as we invest in improvements
to our call center.

    Operating expenses for the first quarter of 2007 and
2006 were as follows
(figures in RMB 000's):


                                                %         
      %      Y/Y
                                    Q1 2007  Revenue  Q1
2006  Revenue  Growth
    Sales and marketing             27,020    41.4%  
21,849   40.9%    24%
    General and administrative      11,188    17.1%  
20,185   37.8%   -45%
    Service development             10,594    16.2%  
10,475   19.6%     1%
    Business tax and surcharges      3,675     5.6%   
3,013    5.6%    22%
    Amortization of  intangibles       265     0.4%     
265    0.5%     0%
    Total                           52,742    80.8%  
55,787  104.4%    -5%

    Please note that prior period sales and marketing,
service development
expenses and business tax and surcharge expenses as
presented in the above
table have been reclassified to exclude expenses related to
our discontinued
operations in order to conform with the current period
presentation.

    Sales and marketing, general and administrative expense
and service
development expenses decreased 7% during the first quarter,
while total
operating expenses decreased 5%.
    Sales and marketing expense increased 24%, and
increased 52 basis points
as a percentage of revenue to 41.4%. The increased expense
was due to
increases in business volume and higher marketing
spending.
    General and administrative expense decreased 45% due to
lower professional
fees during the quarter. General and administrative
expenses as a percentage
of revenue were 17.1% in the first quarter.
    Service development expense is composed of expenses
related to technology
and product offering, including our website, the platform
and the Company's
air, hotel and vacation package products. First quarter
service development
expense increased just 1%, and decreased 337 basis points
as a percentage of
revenue as we leveraged previous investments in our
technology.
    Operating loss was RMB5.2 million as compared to an
operating loss of
RMB15.5 million in the first quarter of 2006, an
improvement of RMB10.3
million due to higher revenue and lower general and
administrative expense,
partially offset by the increase in sales and marketing
expenses and cost of
services.
    Other income, which represents interest income,
unrealized exchange
gains/losses and other income/expenses, was RMB4.3 million
in the first
quarter of both 2007 and 2006. The unrealized foreign
exchange loss was RMB9.6
million in the first quarter of 2007 compared to a loss of
RMB6.8 million in
the prior year period, reflecting Renminbi appreciation
since March 31, 2006.
This increased loss was offset by net interest income of
RMB13.8 million.
    The Company recorded a net loss of RMB0.8 million for
the first quarter
compared to a net loss of RMB12.2 million in the prior year
period, an
improvement of RMB11.4 million primarily due to RMB10.3
million of lower
operating loss.
    Our US GAAP diluted loss per ADS for the first quarter
of 2007 was RMB0.04
compared to a diluted loss per ADS of RMB0.50 in the prior
year period. Our US
GAAP diluted loss per ADS decreased RMB0.46 due to a lower
net loss, partially
offset by a slight increase in the number of shares used in
computing our loss
per share

    Business Outlook
    eLong expects total revenues for the second quarter of
2007 within the
range of RMB73.0 million (US$9.5 million) to RMB81.0
million (US$10.5 million),
an increase of 9% to 21% from the second quarter of 2006.

    Note to the Unaudited Interim Consolidated Financial
Statements
    Financial information in this press release from
eLong's unaudited
financial statements was prepared in accordance with
generally accepted
accounting principles in the United States.
    In May 2006, eLong disposed of Raytime, an operator of
hotel loyalty
programs.  In October 2006, eLong sold the assets and
business of one of its'
divisions operating an interactive online dating community
(the "Division").
In accordance with SFAS No. 144, "Accounting for the
Impairment or Disposal of
Long-Lived Assets", the results of operations,
financial position and cash
flows of Raytime and the Division have been reflected in
the consolidated
financial statements and notes as a discontinued operation
for all periods
presented.  Accordingly, certain items in the first quarter
of 2006 have been
reclassified to conform with the current period
presentation to facilitate
comparison.

    Safe Harbor Statement
    It is currently expected that the Business Outlook will
not be updated
until the release of eLong's next quarterly earnings
announcement; however,
eLong reserves the right to update its Business Outlook at
any time for any
reason.
    Statements in this press release concerning eLong's
future business,
operating results and financial condition are
"forward-looking" statements
within the meaning of Section 27A of the Securities Act of
1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended, and as
defined in the Private Securities Litigation Reform Act of
1995. Words such as
"anticipate," "believe,"
"estimate," "expect,"
"forecast," "intend," "may,"
"plan," "project," "predict,"
"should" and "will" and similar
expressions as
they related to the Company are intended to identify such
forward-looking
statements, but are not the exclusive means of doing so.
These forward
looking statements are based upon management's current
views and expectations
with respect to future events and are not a guarantee of
future performance.
Furthermore, these statements are, by their nature, subject
to a number of
risks and uncertainties that could cause actual performance
and results to
differ materially from those discussed in the
forward-looking statements as a
result of a number of factors. Factors that could affect
the Company's actual
results and cause actual results to differ materially from
those included in
any forward-looking statement include, but are not limited
to, eLong's
historical operating losses, its limited operating history,
declines or
disruptions in the travel industry, the recurrence of SARS,
an outbreak of
bird flu, eLong's reliance on having good relationships
with hotel suppliers
and airline ticket suppliers, our reliance on the Travelsky
GDS system for our
air business, the possibility that eLong will be unable to
timely comply with
Section 404 of the Sarbanes-Oxley Act of 2002, the risk
that eLong will not be
successful in competing against new and existing
competitors, risks associated
with Expedia, Inc.'s (Nasdaq: EXPE) majority ownership
interest in eLong and
the integration of eLong's business with that of Expedia's,
subsequent
revaluations of the Chinese currency, changes in eLong's
management team and
other key personnel and other risks outlined in eLong's
filings with the U.S.
Securities and Exchange Commission (or SEC), including
eLong's Form 20-F filed
with the SEC in connection with the Company's fiscal year
2005 results.
Readers are cautioned not to place undue reliance on any
forward-looking
statements, which speak only as of their dates.

    Conference Call
    eLong will host a conference call to discuss its fourth
quarter and fiscal
2006 earnings at 8:00 pm Eastern Time, May 14, 2007
(Beijing/Hong Kong time:
May 15, 2007 at 8:00 am). The management team will be on
the call to discuss
quarterly results and highlights and to answer questions.
The toll-free number
for U.S. participants is [phone]. The dial-in
number for Hong Kong
participants is [phone]. The toll number for
international participants
is [phone]. The pass code for all participants is
"eLong".
    A replay of the call will be available for 1 day
between 9:15 pm Eastern
Time on May 14, 2007 and 9:15 pm Eastern Time on May 15,
2007. The toll-free
number for U.S. callers is [phone]. The dial-in
number for
international callers is [phone]. The pass code for
the replay is
736960.
    Additionally, a live and archived web cast of this call
will be available
on the Investor Relations section of the eLong web site at
http://ir.elong.net
for three months.

    About eLong, Inc.
    eLong, Inc. (Nasdaq: LONG) is a leading online travel
company in China.
Headquartered in Beijing, eLong has a national presence
across China. eLong
uses web-based distribution technologies and a 24-hour call
center to provide
consumers with access to travel reservation services.
Aiming to enrich
people's lives through the freedom of independent travel,
eLong empowers
consumers to make informed choices by providing a one-stop
travel solution and
consolidated travel tools and information such as maps,
virtual tours and user
ratings. eLong has the capacity to fulfill air ticket
reservations in over 55
major cities across China. In addition to choice of a wide
hotel selection in
the Greater China region, eLong offers Chinese consumers
the ability to make
bookings at international hotels in over 140 destinations
worldwide. eLong
operates the websites http://www.elong.com and
http://www.elong.net.

    Investor Contact:

    Raymond Huang
    eLong, Inc.
    Investor Relations Manager
    [e-mail]
    86-10-5860-2288 ext. 6633



    eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
    (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
    IN LOCAL CURRENCY

                                                  Three
Months Ended
                                              Mar. 31,  
Dec. 31,   Mar. 31,
                                                2007     
2006        2006
                                                RMB      
RMB          RMB
    Revenues
      Hotel commissions                       48,879    
56,026       42,084
      Air ticketing commissions               12,050     
9,593        8,009
      Other travel revenue                     2,077     
1,452        1,456
      Total travel revenue                    63,006    
67,071       51,549
      Non travel                               2,275     
2,647        1,904
    Total revenues                            65,281    
69,718       53,453

    Cost of services                          17,701    
16,651       13,173
    Gross profit                              47,580    
53,067       40,280

    Operating expenses
      Service development                     10,594    
10,569       10,475
      Sales and marketing                     27,020    
26,555       21,849
      General and administrative              11,188    
12,611       20,185
      Amortization of intangibles                265      
265          265
      Business tax and surcharges              3,675     
4,347        3,013
    Total operating expenses                  52,742    
54,347       55,787

    Loss from operations                      (5,162)   
(1,280)     (15,507)
    Other income                               4,329     
2,289        4,263
    Income/(loss) before income tax
     expense                                    (833)    
1,009      (11,244)
    Income tax expense                            52     
1,490          537
    Loss from continuing operations             (885)     
(481)     (11,781)
    Discontinued operations
      Income/(loss) from discontinued
       operations                                112    
(1,332)        (412)
      Income tax expense/(benefit) of
       discontinued operations                     8      
  (2)          (6)
      Gain on sale of discontinued
       operations                                  -      
   -            -
    Total discontinued operations                104    
(1,330)        (406)
    Net loss                                    (781)   
(1,811)     (12,187)

    Basic loss per share                                  
              -
      Continuing operations                    (0.02)    
(0.01)       (0.24)
      Discontinued operations                   0.00     
(0.03)       (0.01)
    Basic loss per share                       (0.02)    
(0.04)       (0.25)

    Basic loss per ADS
      Continuing operations                    (0.04)    
(0.02)       (0.48)
      Discontinued operations                   0.00     
(0.06)       (0.02)
    Basic loss per ADS                         (0.04)    
(0.08)       (0.50)

    Diluted loss per ADS
      Continuing operations                    (0.04)    
(0.02)       (0.48)
      Discontinued operations                   0.00     
(0.06)       (0.02)
    Diluted loss per ADS                       (0.04)    
(0.08)       (0.50)

    Shares used in computing basic net
     income/(loss) per share                  50,685    
50,464       50,354
    Shares used in computing diluted net
     income/(loss) per share                  50,685    
50,464       50,354

    Note that 1ADS = 2 shares

    * Stock-based compensations                2,769     
3,194        3,952
    *Unrealised foreign exchange losses        9,614    
11,899        6,775



    eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
    (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
    IN U.S. DOLLARS

                                                    Three
Months Ended
                                              Mar. 31,  
Dec. 31,   Mar. 31,
                                                2007      
2006       2006
                                                 US$      
US$        US$
    Revenues
      Hotel commissions                        6,329     
7,179       5,250
      Air ticketing commissions                1,560     
1,229         999
      Other travel revenue                       269      
186         182
      Total travel revenue                     8,158     
8,594       6,431
      Non travel                                 295      
339         238
    Total revenues                             8,453     
8,933       6,669

    Cost of services                           2,292     
2,134       1,643
    Gross profit                               6,161     
6,799       5,026

    Operating expenses
      Service development                      1,372     
1,354       1,308
      Sales and marketing                      3,499     
3,403       2,726
      General and administrative               1,449     
1,616       2,519
      Amortization of intangibles                 34      
  34          33
      Business tax and surcharges                476      
557         376
    Total operating expenses                   6,830     
6,964       6,962

    Loss from operations                        (669)     
(165)     (1,936)
    Other income                                 561      
293         532
    Income/(loss) before income tax
     expense                                    (108)     
128      (1,404)
    Income tax expense                             7      
191          67
    Loss from continuing operations             (115)     
(63)     (1,471)
    Discontinued operations
      Income/(loss) from discontinued
       operations                                 15      
(171)        (51)
      Income tax expense/(benefit) of
       discontinued operations                     1      
   -          (1)
      Gain on sale of discontinued
       operations                                  -      
   -           -
    Total discontinued operations                 14      
(171)        (50)
    Net loss                                    (101)     
(234)     (1,521)

    Basic loss per share
      Continuing operations                   (0.003)   
(0.001)     (0.030)
      Discontinued operations                  0.000    
(0.004)     (0.001)
    Basic loss per share                      (0.003)   
(0.005)     (0.031)

    Diluted loss per share
      Continuing operations                   (0.003)   
(0.001)     (0.030)
      Discontinued operations                  0.000    
(0.004)     (0.001)
    Diluted loss per share                    (0.003)   
(0.005)     (0.031)

    Basic loss per ADS
      Continuing operations                   (0.005)   
(0.003)     (0.060)
      Discontinued operations                  0.000    
(0.008)     (0.002)
    Basic loss per ADS                        (0.005)   
(0.011)     (0.062)

    Diluted loss per ADS
      Continuing operations                   (0.005)   
(0.003)     (0.060)
      Discontinued operations                  0.000    
(0.008)     (0.002)
    Diluted loss per ADS                      (0.005)   
(0.011)     (0.062)

    Shares used in computing basic net
     income/(loss) per share                  50,685    
50,464      50,354
    Shares used in computing diluted net
     income/(loss) per share                  50,685    
50,464      50,354

    * Stock-based compensations                  359      
409         493
    *Unrealised foreign exchange losses        1,245     
1,525         845

    Note 1: The conversions of Renminbi (RMB) into United
States dollars
    (USD) as at the reporting dates are based on the noon
buying rate of
    USD1.00 = RMB7.7232 on March 31, 2007, USD1.00 =
RMB7.8041 on December 31,
    2006 and USD1.00 = RMB8.0167 on March 31, 2006 in the
City of New York
    for cable transfers of Renminbi as certified for
customs purposes by the
    Federal Reserve. No representation is intended to imply
that the RMB
    amounts could have been, or could be, converted,
realized or settled into
    U.S.dollars at that rate on the reporting dates.


    eLong, Inc.
    CONSOLIDATED SUMMARY BALANCE SHEET DATA
     (UNAUDITED, IN THOUSANDS)
                                       Mar. 31,   Dec. 31,
Mar. 31,  Dec. 31,
                                         2007      2006   
  2007      2006
    ASSETS                                RMB       RMB   
   US$       US$
    Current assets
      Cash and cash equivalents        1,184,725  1,199,323
153,398  153,679
      Total Accounts receivable, net      37,559     28,493
   4,863    3,651
      Investment securities                  284        163
      37       21
      Prepaid expenses and other
       current assets                     11,701     12,772
   1,515    1,636
      Total current assets             1,234,269  1,240,751
159,813  158,987
      Equipment and software, net         40,231     37,809
   5,209    4,845
      Goodwill                            30,000     30,000
   3,884    3,844
      Intangibles                          3,481      3,746
     451      480
      Other non-current assets            25,658     22,029
   3,322    2,823
      Deferred tax assets                    982        982
     127      126
    Total assets                       1,334,621  1,335,317
172,806  171,105


    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current liabilities
      Accounts payable, accrued expenses
       and other payables                119,871    112,328
  15,521   14,394
      Advances from customers              1,353      1,361
     175      174
      Taxes payable                        9,155     20,735
   1,185    2,657
      Total current liabilities          130,379    134,424
  16,881   17,225
      Other long term liabilities            653        980
      85      126
      Deferred Tax  Liabilities              132        132
      17       17
    Total liabilities                    131,164    135,536
  16,983   17,368

    Shareholders' equity
      Ordinary shares                      4,197      4,192
     543      537
      Additional paid-in capital       1,305,643  1,301,312
169,055  166,747
      Other equity items                   2,398      2,398
     310      307
      Accumulated deficit and other
       comprehensive income             (108,781)
(108,121) (14,085) (13,854)
    Total shareholders' equity         1,203,457  1,199,781
155,823  153,737
    Total liabilities and
     shareholders' equity              1,334,621  1,335,317
172,806  171,105
                                              -          -
      -        -


    CONTACT: 

     Raymond Huang,
     Investor Relations Manager
     eLong, Inc.,
     86-10-5860-2288 ext. 6633
     [e-mail]/