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Tech Industry

Net booms down under

High-tech, multimedia, and Internet companies from the United States are rushing to Australia to set up shop, faced with a crowded market at home.

Many of Australia's first immigrants weren't crazy about being there: They were English criminals banished to the island state.

Now, however, another class made up of U.S. high-tech, multimedia, and Internet companies are going voluntarily to Australia. Faced with a crowded market at home, they are flocking in rising numbers to the land down under to set up shop.

"It's a very impressive, fast-growing market," said David Peterschmidt, chief executive of Inktomi. "Australia's adoption rate for Internet access is about twice as high as it is in other countries."

Neighboring New Zealand, he added, is also a hot spot.

In August, Inktomi signed a pact with Sydney-Based OzEmail to deliver the first commercial search engine for the Australian and New Zealand market. Last week, the company shipped the technology required for the search engine to OzEmail; the product will be launched starting next month, Peterschmidt said.

"Despite Australia's small population, it is very tech-saavy," said Paul Carlstrom, a spokesman for a group of San Francisco multimedia companies that are on a trade mission in Melbourne this week. The group includes, mFactory, Equilibrium, Luminare, OM Records, and Red Sky.

"Australia has a burgeoning multimedia industry, and its developers are eager for first-hand contact with successful content tool and technology providers, developers, producers, and publishers from the United States," said Susan Worthman, executive director of the Multimedia Development group.

Other examples abound:

--Microsoftoften uses Australia as a testing ground for its products. If they succeed, the company ships them to America.

--Motorola teamed with Australian telephone carrier Telstra earlier this month to offer high-speed Net access via cable modems in Melbourne. The service will gradually roll out throughout the country's most populated cities, including Sydney.

--Wildfire Communications announced last month that its popular digital secretary service would be offered in Australia, thanks to a service provider deal with a Sydney company.

--AT&T said last month that it would offer its managed Internet access in Australia, and search engine company Yahoo said it was looking at the market.

Among other recent deals, GTE's CyberTrust announced a project in Canberra to develop an electronic certification service with MasterCard. Two weeks ago, Australia became the third nation behind Japan and Canada to form an affiliate of CommerceNet, a nonprofit coalition that works toward the development of electronic commerce.

Why Australia? As Inktomi's Peterschmidt notes, the country has a fast-growing penetration rate for Internet access. The population also is literate and well-educated, making them prime candidates for advanced technologies, executives add.

It also is easy for American companies to transfer the technology because Australia is an English-speaking country. "It has the 'look and feel' and acts a lot like the United States," Peterschmidt said.

But the picture is not completely rosy. Like the United States, Australia is wrestling with whether to regulate the booming Net. This summer, the attorneys general of the eight Australian territories met to consider adoption of Internet censorship regulations.

This followed attempts by two territories to regulate online content, such as pornography and sexually explicit games.