An inside source at Chinese internet company Tencent (0700.HK) has revealed that the company has bought a 30% stake in travel site 17u.cn, operated by Tong Cheng Travel Network Technology. The size of the transaction, which has already been completed, is on the order of RMB 50-60 mln.
A representative of 17u.cn declined to comment on the matter.
Chen Peng, CEO of air ticket reservation platform 51book commented that travel companies like 17u.cn spend over RMB 10 mln each year on Baidu (Nasdaq: BIDU) ads alone, which can cause significant financial strain. "Attracting Tencent as an investor will bring more customers to 17u.cn, while reducing advertising costs," Chen stated.