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
News
people'It can last and it's terrifying'
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
News
peopleA spokesperson said the support group was 'extremely disappointed'
News
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
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

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

.NET Developer

£650 per day: Harrington Starr: .NET Developer C#, Win Forms, WPF, WCF, MVVM,...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor