Internet growth spurs debate

Rupert Murdoch is not known as a shrinking violet when it comes to launching into new businesses. But on the subject of the Internet, the media tycoon took the occasion of a speech last week to lay out his reasons for caution about investing in the medium which is revolutionising international communications for individuals and companies alike.

Mr Murdoch noted that the firms which have boomed are generally not media companies, and that only time will tell whether the Net will turn out to be as attractive financially as it is technically.

But the past week has brought a spate of reports that underline the dimensions the Internet phenomenon has acquired, with worldwide users now estimated at 85 million.

Just before Mr Murdoch spoke, Yahoo, which might be termed a Net media company, saw its stockmarket value hit US$40 billion (HK$310 billion) - a good deal more than Mr Murdoch's News Corporation. Shares in the online bookseller, Amazon, jumped 30 per cent before subsiding.

One thing Mr Murdoch pointed to was the way the Internet could eliminate middlemen. That is most evident in e-commerce but could also apply, for instance, to entertainment (not to mention newspapers).

A leading American rap singer, Chuck D, has just posted his latest recording on an Internet site belonging to his band, Public Enemy, using a new and improved version of a computer sound file. If that becomes the norm, record companies will have to make sure they have binding contracts with their artists, or else accept that the CD may go the way of vinyl.

The Internet, as Steve Case of America Online (AOL) said last week, is coming of age in such a way that the focus is shifting from technology to policy. And that is raising some eminently political and cultural questions.