In the evolving realm of Internet law, a ruling by Australia's highest court yesterday sent shudders through the electronic publishing world: A Melbourne businessman can sue Dow Jones & Co. for libel in Australia because its article about him reached his hometown via the Internet, profoundly altering the traditional bounds of publication, the court opined.

Some in legal and publishing circles fear the decision could influence similar opinions in courts in Britain and elsewhere.

"It will be the World-Fragmented Web," said Geoffrey H. Kuenning, an assistant professor of computer science at Harvey Mudd College near Los Angeles. "I would call that decision astoundingly stupid. As a private citizen, I'd have to consider whether it's even safe for me to travel to Australia in the future, because if I say something on my Web site, they can sue me in Australian court, and if I set foot there, I'd never be able to leave until I defend myself."

Some legal scholars consider the ruling one of the most significant in Internet publication since French courts two years ago held the search engine Yahoo liable for hate crime prosecution because some users auctioned Nazi paraphernalia on its Web site.

Comparisons were also drawn to a case pending in the federal Court of Appeals in Richmond, Va. A Virginia prison warden, Stanley Young, sued Connecticut's Hartford Courant and New Haven Advocate for columns he contended had defamed him that reached Virginia via the Internet, far beyond the newspapers' circulation area. The columns criticized Virginia's treatment of prisoners transferred there by Connecticut's governor.

One measure of the broad interest in the Australian case is the 18 organizations and publishers, ink and Internet-based alike, that filed briefs in support of Dow Jones' defense. Among them were Amazon.com, the New York Times Co., the Guardian Newspapers Ltd. of London and the Chicago-based Tribune Co., whose dozen U.S. newspapers include The Sun.

"That a lot of media companies weighed in on Dow Jones shows the significance to the media community, and with Australia as part of the [British] Commonwealth and a regular trading partner," said Eric E. Jorstad, a Minneapolis attorney who specializes in media and Internet law. "It's just one more piece of weight on the scales."

Other legal and technology analysts, however, said the ramifications of the lawsuit by mining baron Joseph Gutnick against Dow Jones & Co. for an October 2000 article in Barron's remain to be seen. The Australian Supreme Court did not rule on the libel allegation, only that Gutnick had the right to bring suit in his home state of Victoria.

Matt Jackson, a former broadcaster and assistant professor at Penn State University who tracks Internet regulation, said the Australia decision should not be read too broadly, at least not immediately. The court appeared to make some distinctions for the Dow Jones Web site, which is restricted to paid subscribers. About 1,700 live in Australia.

"Every case is fact-specific. The challenge is figuring out the similarities and differences," Jackson said. "Were it a free Web site without registration, maybe they would have reached a different decision. But the notion that people who put something on the Web in one jurisdiction can be hauled into court in another jurisdiction is indeed very troubling."

Dow Jones & Co., the New York-based financial news company that publishes The Wall Street Journal, Barron's and stock market indicators, said in a statement that it was disappointed by the ruling and will continue its defense. It argued that the case should be heard in the United States because the article was published and disseminated worldwide from its computer servers in New Jersey.

"On the whole, the judgments did however recognize the unique challenges posed by Internet publication," the company said.

Gutnick told an Australian television station that he believes the case should be heard in his hometown, where neighbors were able to read about him on their computers and where he is best known, according to the Associated Press.

"You have to be careful what you write, and if you offend somebody or write malicious statements about people like what was done in my case you can be subject to being prosecuted," he told Australia's Channel Nine.

The issue of where people can bring suit if they believe their reputation has been marred by the media has been contentious long before the rise of the commercial Internet in the 1990s.

One of the most famous First Amendment cases, New York Times vs. Sullivan, was originally filed in Alabama where a Montgomery police commissioner sued because an advertisement criticized his city's treatment of the Rev. Martin Luther King Jr. and other civil rights activists. The commissioner, L.B. Sullivan, believed that a jury in the segregationist South might be more sympathetic than a jury in the newspaper's base in New York. Sullivan won in state courts, but the Supreme Court overturned the judgment in 1964.

Hollywood celebrities regularly bring libel suits in California against supermarket tabloids that originate elsewhere. Nor is it uncommon for a publisher to alter the format or content of a magazine or newspaper for different markets.

The Australian jurists acknowledged that the Internet has vastly increased the ability of publishers and broadcasters - or individuals for that matter - to disseminate material around the globe. But they said that the medium is only the latest to broaden the reach of communications. Advances in publishing, radio and television also had to come to terms with defamation cases, they said.

"Pointing to the breadth or depth of reach of particular forms of communication may tend to obscure one basic fact. However broad may be the reach of any particular means of communication, those who make information accessible by a particular method do so knowing of the reach that their information may have," the court said. "In particular, those who post information on the World Wide Web do so knowing that the information they make available is available to all and sundry without any geographic restriction."

Several observers said judges are often uncomfortable with decisions involving technology.

"We're still talking about libel law, but we're talking about a set of circumstances that no part of the legal system is well-equipped to address," said Steve Jones, a professor of Internet studies at the University of Illinois at Chicago.

"We've greatly leapt ahead of the law in terms of technology. There's a genealogy forming here, with cases involving porn in the U.S. being extradited from one state to another, the French case with Yahoo! and now this," Jones said. "You can connect the dots and see a trajectory toward the courts and law enforcement finding ways to practically deal with the realities of the Internet. The Internet is not above or beyond the law, but it is a special set of circumstances that we're groping our way through, and it will take some time."