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"A decade after the first internet boom bubbled and burst some believe there is another dot.com bubble forming. The money inflows and the enormous valuations - think Facebook at more than 70 billion - have prompted cries of 'bubble'. But many argue that internet business models are far more viable now, and the big money is largely forming around private companies - not public companies - so it is much less likely this time around that ordinary investors will lose their shirts. Another major difference is the international spread of money - of the 25 biggest internet deals in the past year, 15 were non-US investments and 12 were Chinese."

"In October last year, Netflix launched an unusual contest. The online movie rental company is offering 1 million dollars to anyone who can improve their recommendation engine by 10%. Netflix is known for its innovation and bold moves and in the grand scheme of things, $1M is not a lot of money for such a business."

So will they struggle? Not in the short term, but in the long term as major telecommunication carriers, CE vendors like Sony and Apple, and TV companies like Seven Media and Foxtel start rolling out content delivery systems up against them in the Australian market.

Optus and home entertainment provider Quickflix today announced a marketing alliance to promote online DVD rental to Australian households. Consumer interest in DVDs has exploded in Australia with approximately 50 per cent of households now owning a player. Quickflix, a new Australian venture, will tap into that market.