Tech notes

Apr 20 2006 By Herb Kim, The Journal

You may not have heard of MySpace yet. If you haven't, just ask any teenager! Three things you should know about MySpace - without it there would be no Arctic Monkeys (you may not see this as a bad thing); it is the top internet destination for teenagers and many pre-teens; and from nearly nowhere a year ago, MySpace.com is now the third biggest website in the world.

And, as this is a business section column, we should add that Rupert Murdoch recently paid more than £300m to buy MySpace.com - not a bad return for shareholders!

This illustrates clearly why, after all the hype, all the promise, this year really is the year when the internet will change your life once again. Look at the facts:

This month, Crazy by Gnarls Barkley became the first number one hit based solely on downloads from the billion-selling iTunes and similar sites; for the first time the UK will this year spend more time online than watching TV; and it's predicted that this year will see more money spent by advertisers online than on any other media.

Understandably, someone sitting in their comfortable corner office in Hollywood - still the world centre for film, TV and music - is beginning to get a little edgy. And that's why so many made the trip last month to Santa Monica, the centre of digital media in the US and the venue for Digital Hollywood, a conference which looks at the impact of digital media on the entertainment business.

This year, Codeworks sent its head of digital media, Simon King, to look at opportunities for the North-East. He reports that the big traditional media companies are genuinely scared about both the scale and speed of the changes buckling and reconnecting various value and supply chains.

If sites such as MySpace and iTunes become the new hit-makers of music, film and TV, they will dilute Hollywood's power and, eventually, profits.

The beauty is, MySpace could exist anywhere. One of the biggest digital acquisitions in recent years, Skype - bought by eBay for $2.6bn - was based in Luxembourg. Two of the biggest digital media IPOs last year were for Chinese companies and the biggest LSE IPO in five years was for a Gibraltar-based web gambling company.

So, globally, people are creating huge wealth via the internet.

An increasing number of companies in the North-East are exploiting this. Sage continues to develop more ways to use the internet and it isn't too long ago that Sunderland-based Leighton built and then sold its Domain Names business. So, given the sheer volume of creative talent in this region, don't be surprised if the next MySpace comes from Holywell rather than Hollywood!

Herb Kim is chief executive officer of Codeworks, the North-East centre of excellence for digital technology.