Focus: China yields to a brave new Web

"IF WE were making a profit already, I wouldn't be doing my job," says Lyric Hughes, chief executive of China Online, a one-year-old Internet company.

Yet after an initial scramble for funds, financing the new company is proving almost alarmingly easy. "To start with I would go to all sorts of lengths for a $100,000 investment, but recently people have been ringing up to offer tens of millions," she says. "I do return all the calls still," she adds.

This eagerness to invest in the Internet is expanding Ms Hughes's ambitions, and their range offers an insight into the almost endless possibilities still available to the pioneers of online business. Her original plan to bring news out of China to the world has expanded to include taking the world into China. Chinese Internet service providers are few and weak, yet there is huge demand for Chinese-language content. "I'm causing some alarm to my board. I had thought we would do this some years down the line, but this business moves incredibly quickly," she says. She is also considering expanding her Internet news service to other relatively unwired parts of the globe, such as Africa.

The genesis of China Online was her 20 years' experience working for an international marketing agency that served US companies in China. Her expertise and contacts allowed her to fax out information about events in the aftermath of the death of Deng Xiaoping earlier than anybody else - earlier even than the Chinese newspapers since they provided her with news before printing it themselves.

But it was the growth of the Internet as a means of distribution that allowed her to set up China Online. "We are a technology-enabled company," she says. "Without the Web as a distribution mechanism it would have taken us many years and much more money."

Most people assume that any online provider in China has a problem with state censorship, but Ms Hughes is vehement in her rejection of this idea. The authorities are extremely concerned about pornography, but otherwise regard the Internet as a useful means of free expression, she argues. Not once have they complained to her about any news item carried by the service, which Zhu Rongji, the Chinese premier, reads regularly. This contrasts sharply with the control freaks at Microsoft, for example, who exert considerably more effort than the Chinese government to dictate China Online's content.

Her new ambition is to create, in addition to the existing English language news service on China, a package of news, entertainment and sport in Chinese for China. The structure of local telecommunications costs has made it impossible for Internet service providers to thrive domestically. They are small and weak, so the market is effectively open to an outsider.

Ms Hughes approached Ark Capital, a Chicago-based venture capital firm specialising in ethnic minority businesses, to help to raise an initial $5m a year ago. She is the first female entrepreneur backed by Ark. Of the 1,800 venture capital-backed start-ups in the US last year, 50 are headed by women.

The company's financial plan envisages break-even point next year or soon after - but the timing depends on the choice of strategy. The more ambitious it is, the later the profits start to roll in. The point, she argues, is to build a brand name and ensure that the company is first in its field. That is what builds competitive strength in the fledgling Internet economy.

Ms Hughes is the absolute antithesis of the computer nerds who have founded so many other e-businesses. Her senior colleagues in the 28 person company include Doug McGill, who set up the Bloomberg operation in Hong Kong. The company's chairman is David Hale, the economic pundit at the Zurich Group in Chicago. Then there are the employees: "They are there when I get to work and I have to send them home at night," says Ms Hughes, who has two children. China Online has more than 300 consultants and analysts to call on.

There are three existing strands to the business. It is a news agency, which has customers such as Reuters and the Financial Times. It provides a proprietary database and information service to corporate customers, including giants such as AT&T, that do business in China.

Thirdly, and perhaps still most important for growth, China Online is setting up partnerships with e-commerce companies, which will allow them to crack the enormous Chinese market. China already has 4 million Internet users, more than the UK. This is forecast to grow to 10 million by next year and overtake the US online market by about 2006.

"People in China don't really have access to shops and goods at all. They don't have banks as we know them," she says, arguing that the country might well skip the stage of having high street shops and banks.

Ms Hughes clearly has a vision of almost infinite possibilities for her business, combined with a sense of urgency about the need to grow. As with so many net entrepreneurs, whose enthusiasm is perhaps the most convincing argument for believing the US economy does have new fundamental strength, Ms Hughes sees a bright future for her China Online. "Perhaps we will hit a brick wall, but if you're not running so fast that you might crash into the wall, you're not running fast enough," she says.

http://www.chinaonline.com

Suggested Topics
Sport
world cup 2014A history of the third-place play-offs
News
Tommy Ramone performing at The Old Waldorf Nightclub in 1978 in San Francisco, California.
peopleDrummer Tommy was last surviving member of seminal band
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
The Mexico chief finally lets rip as his emotions get the better of him
world cup 2014
PROMOTED VIDEO
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
Life and Style
Several male celebrities have confessed to being on a diet, including, from left to right, Hugh Grant, Benedict Cumberbatch and Ryan Reynolds
...and the weight loss industry is rubbing its hands in glee
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Sport
Yaya Touré has defended his posturing over his future at Manchester City
News
Detail of the dress made entirely of loom bands
news
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
beauty
Sport
There were mass celebrations across Argentina as the country's national team reached their first World Cup final for 24 years
transfersOne of the men to suffer cardiac arrest was 16 years old
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice