Traditional mainstream media in many Asian countries have been forced to function as ideological state apparatus under the tight control by authoritarian regimes and dissidents could only voice out their views via the so-called “illegal” publications or “legal” publications with limited circulations. Thanks to the widespread use of computers and Internet, the State can no longer dominate over the marketplace of ideas now. This paper analyses the role and contribution of Internet in the democratization of Malaysia from the perspectives of challenging the effectiveness of regulation by the State over the mass media and promoting pluralism in public opinion. It also discusses how the economic and political changes have catalyzed the use of Internet by the masses and at the same time prompted the State to launch counter-attacks against the perceived “threats” posed by the new media.