Subrah Iyar and Min Zhu: Meetings on the Web

Positions: CEO, and president and chief technical officer, respectively, WebEx

Contribution: Iyar and Zhu have made WebEx a profitable public company with a 58% market share for Web-conferencing services

Challenge: Sustaining double-digit annual growth by adding new services in areas such as e-learning

In the U.S., Min Zhu is just another e-business entrepreneur. But back in his China homeland, he has attained celebrity status as a native son who overcame poverty to achieve wealth. In his 20s, Zhu, along with many other Chinese intellectuals, was forced to work on a farm for seven years, as the government attempted to get the country's intelligentsia "reeducated" into the appropriate communist mindset.

As soon as Beijing relaxed its grip on the citizenry, however, he was one of the first Chinese to leave for the U.S. After earning a degree in engineering from Stanford University, Zhu found a partner from India, Subrah Iyar, and started WebEx, now the world's largest Web-conferencing company, in San Jose, Calif.

Unlike most Web entrepreneurs, Zhu, 54, and Iyar, 45, didn't see their Silicon Valley dream rise to the sky only to collapse. In fact, their disciplined management allowed the business to go public in the difficult environment of mid-2000. This year, WebEx became profitable, and that could be just the start.


  It dominates the market for Web-conferencing services, which could grow from $170 million in 2001 to $1.3 billion in 2008, according to consultancy Frost & Sullivan. Zhu and Iyar plan to capitalize on that potential to turn WebEx into a billion-dollar empire in five years.

A pipe dream? Not necessarily. "These guys really understand the market," says David Alexander, a Frost & Sullivan analyst. "They've shaped it." And demand for WebEx services -- which allow customers to talk, share PowerPoint presentations plus animation and video, and record and play back meetings -- skyrocketed during the corporate cost-cutting that occurred post-September 11.

In its second quarter ended in June, WebEx revenues reached $33.2 million, up 80% from a year earlier. Its net income was a healthy $3.3 million, vs. a loss of $9.3 million in the same quarter of 2001. Growth should accelerate as WebEx expands into e-learning, Iyar predicts.


  Already, WebEx' training capabilities allow an instructor to work with one or two students individually, while the rest of the distance-learning class is busy writing a paper, for instance. It also lets companies train their employees or customers remotely.

WebEx also continues to push its way into big corporations, many of which still aren't familiar with its technology. It already serves 6,400 large companies, Zhu says.

Web conferencing "is going to be a bigger and bigger deal as more bandwidth becomes available," declares Charles Martin, chairman and CEO of think tank NFI Research. If he's right, then Zhu, who's already a magnet for students and entrepreneurs on his business trips to China, will become even more of a hero there. Not that he wants the fame. In fact, he says he sometimes misses farming.

By Olga Kharif in Portland, Ore.

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