This paper explores some new challenges facing universities in a global multimediated Internet-based environment, as they seek alternative paradigms and options to remain true to their core business. At a time of rapid technological change, and contested, complex concepts associated with globalisation, knowledge is becoming a primary factor of production in a global economy. Universities face macro challenges of responding to the exponential demand for higher education, decreasing government funding, and the changing nature of knowledge, student expectations and global competition. While advances in the Internet can support constructivist, self-directed interactive learning, its implications for higher education remains complex and problematic. The paper examines potential challenges of new educational approaches within the framework of more traditional open learning and e-learning environments. The main challenge is to develop a university that shifts the paradigm from the conventional national university to a sustainable global learning system that maintains quality in teaching, learning, processing and applying knowledge to real-life problems in diverse cultural contexts. (Contains 1 figure.)