Janet Stites is the editor and publisher of ChinaBusinessKnowledge.com, which covers China-based companies whose shares are trading in the United States.
With the news that China-based Alibaba plans to trade in the States, her site is likely to become more popular in the coming months.
Stites has a 25-year history as a business, technology and science journalist. She has been a business columnist for The New York Times, was founding publisher and editor of PHONE+ Magazine in the late 1980s, co-founder and CEO of AlleyCat News magazine, the first editorial director of Jupiter Communications in the mid-1990s and a freelance writer.
She has been a feature writer for OMNI Magazine and written for other various national publications such as Fortune Small Business, Self Magazine, and Portfolio magazine. As well, for 15 years, she was a contributing writer for the The Bulletin of the Santa Fe Institute, interviewing world-renowned scientists, such as John Holland, Murray Gell-Mann, Tom Ray, Stephen Langton and Beniot Mandelbrot.
She graduated from Syracuse University’s Newhouse School of Communications with a degree in magazine journalism and received her M.F.A. in fiction writing from UNC-Greensboro. She lives in New York City with her son, Sam.
Stites spoke about her website with Talking Biz News by email. What follows is an edited conversation.
TBN: How did you get the idea for China Business Knowledge?
After I had to fold my magazine, AlleyCat News, in the fall of 2001, the journalism market was at a standstill. I started doing some marketing and consulting work. I also launched an online journal to track executives working in start-ups on the East Coast called Talent Pool News [East]. The goal was to eventually use the site as a marketing tool to provide recruiting services to venture funds seeking execs for the companies they funded (as, unlike, the west coast, it is not so easy to find executive talent for start-ups on the east coast).
When I announced the recruiting initiative, an industry friend brought me into a consulting gig to help a Chinese financial services firm. The firm had a dozen Chinese companies trading on the U.S. markets (at that point, on the OTC). They wanted us to find financial exes to “shadow” their CFOs, as well as to recruit western executives to sit on the boards of the companies. They saw my media background and also asked me to do some public relations.
We had a good run for four months. Then Lehman went bankrupt. The firm went belly-up.
Journalism was still dead, even worse, as was everything else. So after a year of walking around in a fog and doing too much volunteering, I decided to tap what I had learned about the sector of China-based/U.S. listed companies and launched CBK in August 2009. Essentially, I put up the first version of my site over a weekend.
TBN: What business stories do you cover?
JS: The bulk of what I cover can fall under the header of “Market Moves,” including uplistings, IPOs, buyouts/Going private mergers. But I also cover executive and director resignations and appointments and SEC news, such as insider trading investigations or outright fraud.
I use my “Publisher’s Notes” column for each edition to editorialize or talk about broader issues going on in the sector, the global economy or China. It is sent by email, with “headlines” and a link to the latest news on the site.
My site also has sources of information for investors, such as a list of most of the China companies trading on the U.S. markets, organized by exchange. I include a link to each company’s website and QuoteMedia data. For another example, I am currently compiling a list of companies which have gone private or are in the process and a list of “dark” stocks (mostly on the OTC Pink or Grey markets). All this is behind the pay wall.
I also write “Special Reports” on pivotal topics. I would like to do more, but the news rains down on my every day and it is hard to find time to do longer pieces. In fact, one thing I cannot do is report quarterly numbers or numbers from annual reports. It is not possible for me to do a thorough job, so I don’t do it at all.
Right now I am only covering about 60 percent of what I would like to do with CBK. It is somewhat crippling, like a football player only being able to run the up to the five-yard line and then someone yells STOP!
TBN: How do you get your story ideas?
JS: Since public companies must disclose information which can “move” their stocks, the news is easy to gather through press releases. I keep it simple, but add context. For instance, if a company’s announces the resignation of its CFO, I will include other pertinent info they may have left out, like that the company has lost three CFOs in 18 months (a big red flag for investors), or something of that ilk.
For larger stories, I stick with topics which are current to the market. I had hoped to do more company profiles, but it is difficult to find the time bandwidth.
TBN: Who are your reader?
JS: CBK is geared for investors, whether individual or institutional. But, of course, just like any trade magazines many executives from professional services firms read it — lawyers, accountants — China-centric associations and institutions, and analysts. Also, just people interested in the China market, even if they are not going to invest in China-based/U.S. listed companies.
TBN: How are you making money?
JS: I have a number of revenue models for the site itself, all in their infancies, but with high potential for economies of scale. Examples:
- Paywall
- “Advertorial” type of company profiles for professional services firms
- Video presentations where companies can post videos of their financial presentations a tour of their facility, or Q&A with an executive. It becomes their “real estate” (this is before its time).
- I have a Google map with pins to the addresses of the companies I cover. Eventually, I will be able to monetize via custom pins. I have not nailed that down.
- Dim Sum Networking Lunch: I have been hosting a networking lunch in New York at a famous dim sum restaurant. There are no speakers. It is just a time to come meet friends, make new friends, and eat some great food. People love it. I sell sponsorships. It is break even now.
- Proprietary research: I do proprietary research (I would like to do more). I have done compensation reviews, by title and industry, using SEC’s filings and business development research based on a firm’s particular niche. I would not do any work which undermines my editorial.
- I look forward to be able to do more research, webinars, and more “content” events.
TBN: Have you thought about expanding your staff? What would you add?
JS: I would love to expand my staff, but I do not have the cash flow right now. First, I would hire an associate editor to take over the collating and writing up the weekly news. This would allow me to move toward the “publisher” part of the equation. If I can get some serious sales going, I could add more editorial help. But I am a patience person. This sector is still in the womb. Chinese companies have been trading on the US markets for less than a decade. I am trying to make sure CBK makes it for 20+ years.
TBN: Why is there a demand for business news about China?
JS: The U.S. may have the biggest GNP, but China has the most people by a long-shot. Everyone wants to do business with China (even the cartels as we found out just a few weeks ago). Yes, there may be a downturn in manufacturing and spending in China, but just like there was a downturn in the Internet economy, the Internet was not going away. China is not going away either. Had they kept the pace they were on, it would have been bad for everyone. They would have had the same horrific collapse we had here in 2008.
It is quite remarkable that China has become what it is today without any major wars. Even though our governments butt heads on some things, it is not a “hot spot.” Executives from all over the world flock there, with their families, to do a stint at their outposts of their corporate offices and experience Asia. Although there is a bit of a slow-down of westerners rushing there due to the last two years of severe pollution in the major cities.
TBN: What are your biggest issues in covering stories?
JS: Mostly, I just do not have the time to do the job I want to do. As well, the Chinese companies use investor relations firms also for public relations and the IR firms don’t understand the press, so often I cannot get the information I need. Many times they do not even respond to my email requests. As well, it is hard to get interviews with the executives or get to know them well, other than the CFOs.
TBN: What do you think about mainstream media coverage of China business stories
I don’t want to pretend I am an “expert” on China overall, far from it, so I will tread lightly here. There are legions of journalists who were in China in the early years (like when you still had to squat over a toilet, even in the metro areas). And I am in awe of them. Many of them were the early Asian studies majors (in the ’80s) when Russian’s studies was all the rage.
So these people had great foresight and were probably part of a very small group of westerners learning Mandarin. I was invited to a luncheon “China Daily” hosted at the Asia Society. They had a number of journalists (mostly from the WSJ) telling stories about the early days. It was riveting. I think I missed my calling. I am not one who is brave enough to be on the front lines, but I think Hong Kong would have been a good move for me in my 20s.
In general, however, I don’t go out of my way to read stories about China in the mainstream business press, for numerous reasons, 1) I am too busy writing my own copy, 2) I don’t want to find myself in a position where I accidentally incorporate information from someone’s else story into mine, 3) I think many reporters misconstrue statistics and often choose terrible people to quote (i.e. like quoting the fox in the hole), 4) I think many of the stories are skimming the information and do not provide context, which can make a story be misleading to the reader.
I remember reading an article in one of the top business papers mentioning that China had 1 billion cell-phone users. They may have 1 billion cell phones being used, but people often have more than one cell phone, like we do here.
Also, while the press routinely says Facebook is banned in China (true), they rarely mention that students often do a work around, via servers in Hong Kong and set up Facebook accounts. They don’t use their real names or put down where they are studying. That said, if you are a Western reporter living in China, you would not necessarily want to report that. It is not such critical information and you have to pick your fights with the PRC leadership.
I have my favorites, like David Barboza from The New York Times. Also Rob Schmitz, who is in Shanghai for public radio’s “Marketplace” show, and Scott Tong before him. Doug Tsuruoka, who is an editor at Investor’s Business Daily, has a background covering Asia, and lived there in the 1980s. He does a good job covering the China sector on pivotal news issues.
In general, I think it is a tough time for the mainstream business press as the goal is to be first on Twitter and social media in general, and first to post stories online (to get at the top of the list on the search engines). How can the journalists and editors possibly do respectable researching and reporting under those parameters? What’s more, amateur bloggers and even the way press releases are distributed confuse the readers as to what is press and what is promotion.
Being a “trade” journal, of sorts, lets me off that hook a bit on breaking news. In some ways I benefit from the frenzy to publish.
I will give you a good example. A Chinese technology company called Longtop Technologies was accused of fraud. It was considered a respectable company, which had had heavy duty investors and IPOed to the NYSE. Its CFO was implicated. He is Canadian but had been living and working in China for a while and was involved with other high-profile companies. His name is Derek Palaschuk. This news was covered by the mainstream business press, but no one but me put time into doing a story on Palaschuk. So if you search his name, generally that story will come up on the first page of results. If the WSJ, Financial Times, The New York Times, had also done further reporting on Palaschuk, mine would be “lost.”
TBN: What have you taken from business journalism in being your own boss?
JS: I would flip that question around. Having built a business from scratch, like I did with AlleyCat News, I would ask “What have you taken from launching and running a company for your work as a business journalist?” I would answer A LOT.
Most journalists don’t have first-hand experience in the business world. They don’t know what it takes to set up a coffee shop or salon, much less start a company like Quicken, Amazon , or Cracker Barrel. Most journalists have never signed as a guarantor on a business loan, negotiated a lease, put in a phone system, dealt with all the tax issues, set-up Quickbooks, much less raised money. They have not sweated payroll. They may not even know that most advertising agencies pay on 90 days terms and that there are executives in their own back office living off of Tums lunches while trying to figure out a way to make payroll, even during a bull market.
In fact, having been on both sides, I think there is a lack of respect on the part of many journalists for the sales staffs and executives of their own companies. Not that I condone the way journalists, editors, photographers, copy-editors, fact checkers are being fed to the lions while the suits watch. There are a lot of companies using the downturn in publishing as a way to re-write the rules. And it’s the staff that creates the product that is getting the shaft.
TBN: Where do you see the site in five years?
JS: My goal is to have CBK be the “go-to” online journal to find information about publicly-traded Chinese companies, no matter which exchange they are on, Shanghai, HKEx, U.S., Canada, etc. I look forward to a time when I have a multi-medium platform, adding video interviews, and use Google maps and other innovative platforms to further monetize the site.
I also would like to spin out some other niches in the China business sector. Additionally, I would like to do some print, like an annual glossy round-up on the sector, that I would send to lists of investors. In it, I would sell full-page ads to the companies trading (for investor relations purposes) and to the professional services firms which cater to the market. I once met the person who published the program for the “Westminster Dog Show.” Every dog owner participating buys a full page, color ad featuring their dog. He had a great business just of that yearly event. That is where my idea came from, i.e. I would pitch the Investor Relations firms to have their clients buy full-page ads to get the attention of the investors. It could be a major cash cow after a few years.
For the long term, I would like to have an incubator of niche publication, some related, others not. But with the intent I could cross-sell advertising or subscriptions, or other revenue models. In general, all of the above is just a matter of capital and manpower, an age-old problem pre-dating the Silk Road.
