FORTUNE magazine has always covered the big stories in business and followed the trends and the movers and shakers who shape them.

And with FORTUNE China, the Chinese edition of the renowned publication, a global perspective which has increasing relevancy to business leaders in China, is presented, says Michael Federle, group publisher of FORTUNE and FORTUNE Small Business.

Federle, who is in Beijing to promote the upcoming Global Forum in May, was asked to shed light on the positioning of the flagship magazine vis-a-vis those of its two major competitors.

"Business Week is a news magazine," he said. "If you miss the week's business news, it sums things up nicely for you. Forbes is more about wealthy lifestyles. It teaches the rich how to spend their money."

On its home turf, the big three are locked in a neck-to-neck race. Data from the Publishers Information Bureau shows that advertising pages, a major indicator for magazines' health, have been edging up and down almost in tandem. For 2004, FORTUNE had a total of 3,405 such pages; Forbes, 3,470 and Business Week, 3,164.

That was way down from 2000, the height of the Internet boom, when FORTUNE led the three at 6,259 pages.

"All of us were a little over-enthusiastic at the time," Federle recalled, when asked how business titles like his contributed to and participated in the creation of the Internet bubble.

"We follow the money," he rationalized. If venture capitalists spend billions of dollars in an industry, FORTUNE will be there to report the trend. He acknowledged the risk of being blinded by the frenzy and turning an investment guessing game into a self-perpetuating roller-coaster.

"Our editors try to rise above the din and take a detached and critical view," he explaind, citing a 1998 piece that questioned the "dot-com ethic."

"The Silicon Valley insiders were livid," he described of the response to the not-so-gung-ho FORTUNE article. That was a time when leaders in the technology sector were revered like gods and business magazines were under enormous pressure to lean heavily towards technology coverage.

"We talked about whether we wanted to transform our title into a so-called new economy magazine. But in the end, we decided that we should keep it as a general business magazine," Federle said.

The gig three seemed to reach similar solutions: Forbes and Business Week had new economy-specific supplements while FORTUNE's parent company acquired Business 2.0, an existing title in the spate of advertisement-flush, back-breaking, praise-singing-only New Econ titles.

75 years of prescience

Federle proudly emphasizes that in the 75 years of the magazine's history it has correctly predicted many important trends and events in the business world. The creation of such new financial tools as mutual funds is a case in point. FORTUNE also pinpointed the tech sector as early as the 1970s and followed it up throughout the '80s and '90s.

The special issue on China was a reminder of its foresight in economic forecasting.

"Of course I hope there won't be any bubble busting here," he joked.

However, there have been trends that the FORTUNE editors were not sure whether they deserved additional coverage. Federle cited bio-technology and nano-technology as two such examples, where the amount of investment seemed to point in one direction, but the products that have come out have not seemed to justify the attention.

FORTUNE, as a business title, has always been influenced by the economy. But the business cycles are more reflected on the advertising front, he said.

"The quality of editorial content is not affected by the swings in the economy."

FORTUNE has always prided itself on the "prestige" that the title holds among top levels in business management. When it was launched at the beginning of the Great Depression, it charged a dollar per issue, which was very expensive at a time when most magazines cost just a nickel per copy.

Federle attributes its success to its editorial team. "We have quality people on our staff. Some started as reporters, but most have honed their skills at other reputable media organizations. We provide room for career growth and development. As a result, we have very low turnover."

"Suffice it to say that it is very difficult to get a job at FORTUNE," Carrie Ross Welch, vice-president of communications at FORTUNE said.

Global circulation of FORTUNE's magazine has consistently exceeded 1 million copies an issue in the past few years. Of them 830,000 are subscribers.

China's magazine market

FORTUNE China has a controlled circulation of 140,000, which pales in comparison with the US version but is relatively high by Chinese standards. It targets the nation's business elite.

"In China, our share of the voice is high, and we get respect," says Federle.

When asked if the Chinese editions of Forbes and Business Week or the local business titles are major competitors, the publisher responded that "we see everyone as our competitor."

But that does not mean it will go up against all other business titles, which, at last count, number in the 50s in the mainland market, or exceed 70 if one includes weekly business newspapers.

FORTUNE China has limited original content, he says, because the focus is on the global perspective.

"Local titles come with local credibility," he adds.

Federle said that in the US market there are, on top of the big three, about 10 core business magazines. The rest are vertical niche titles.

Commenting on how many titles will ultimately survive in the Chinese market, Federle said "what works in the United States may not necessarily work in China."

And he mentioned that in Japan the magazine market seems to sustain a lot more titles than in the United States.

FORTUNE China is especially keen on those Chinese companies that are growing so fast that their impact is felt beyond the border. As a consequence, more and more mainland companies have found their way onto the FORTUNE 500 list.

But FORTUNE is not going to launch a list for the richest local celebrities. "We do not engage in circus acts like that," Federle maintains, issuing a not-so-subtle dig at competitor Forbes.

As for possible local editions of other Time Warner magazines such as People and Entertainment Weekly, Federle says that he has no announcement to make, adding that feasibility depends on local regulations.

China's market for business books, especially how-to books, which is huge and has yielded numerous best-sellers, has been dealt a heavy blow in the past week when it was found that many of them were phony books with phantom authors. Greedy publishers have either plucked passages from existing content or hired college students to make some up, and then slapped a foreign-sounding name on the cover. One was Paul Thomas, with the title of a Harvard business professor.

"That shows China has an insatiable appetite for information, and information comes in many sizes and varieties," Federle said.

He further explains that how-to books are also big sellers in the United States, but "some are reputable and some are nonsensical." He does not see "big harm" in them as long as they are authentic.

Federle points out that FORTUNE frequently interviews opinion leaders from business and academia and picks their brains.

"The best minds share their insight with our readers."

On top of that, the magazine has recommended the 75 best business books ever written, Federle said.

(China Daily 04/25/2005 page5)