This paper examines some of the impacts of the widespread adoption and use of the Internet in advanced countries on business, consumers and the media. It is argued that while capital costs of entry into Internet‐based businesses may be very low, this does not guarantee that markets in which such firms operate will necessarily be hotly contested, for success may require substantial sunk costs to be incurred in development. It explores the changing nature of market institutions associated with the rise of e‐commerce (including the advent of what are labelled ‘portal’ firms) and associated changes in the division of labour between buyers, sellers and intermediaries. The authors provide behavioural, evolutionary, and information theoretic perspectives on these dynamic issues.