In a span of a week, SPH floated its Internet portal, unveiled plans for two new dailies, and formed a broadcasting unit after the government shook up the industry by vowing to issue new print and broadcasting licences.

SPH posted net profits of S$201.59 million in the six months to February, up 44 per cent from a year ago on the back of an improving economy and expected better performance this year.

Strong growth in its newspaper division will tide over expected initial losses of the two new dailies, broadcast unit SPH MediaWorks, and the SPH AsiaOne Internet portal, officials said.

Tjong Yik Min, group president of SPH, said: "These are investments for the future.

"There will naturally be start-up losses in the first few years, but these will be mitigated by the strong growth in the newspaper business on the back of an economic recovery."

The group has invested S$50 million each in MediaWorks and AsiaOne, and ore than S$1 million in free commuter newspaper Streats, while declining to say how much it has spent on Project Eyeball, which combines a print version and constantly updated Web site.

Investors were impressed by SPH's ability to adapt to the changes in the media environment, and its share price jumped to as high as S$29.80 on Thursday before closing at S$29.20 on Friday, up S$3 from the previous week, as foreign funds bought up the stock.

Mr Tjong said MediaWorks and AsiaOne were the group's "building blocks to help achieve our long-term vision to become a regional media player providing quality content and services to consumers".

AsiaOne hosts the online editions of the group's six newspapers, including its flagship English daily, the Straits Times and Chinese, Malay and Tamil papers.

The government move gradually to liberalise the media industry has its share of supporters and sceptics.

"Benefits include the obvious economies of scale for the players, the capacity to compete with big foreign players, more advertising space and time for the advertisers, and more variety in content for viewers and readers," said Arun Mahizhnan, an associate professor at Nanyang Technological University's School of Communication Studies.

"The downside is, it is the same old duopoly. This is no inspiration to those who were looking for a wider editorial spectrum or broader industry capacity," he added.

The other half of the duopoly is dominant broadcaster Media Corp of Singapore (MediaCorp), owned by state investment arm Temasek Holdings.

MediaCorp is making its foray into SPH's turf, with plans to launch its own free tabloid, Today, with a working capital of up to S$20 million.

Vijay Menon, secretary general of the Asian Media Information and Communication Centre, welcomed the government's liberalisation process as "a positive step".

"Normally when markets open up too quickly, you get situations like in Malaysia where new entrants bring in too much foreign content," Mr Menon said.

Foreign newspapers and magazines as well as cable news channels are freely available in Singapore, but the domestic media are regarded by officials as a strategic and politically sensitive industry.

Deputy Prime Minister Lee Hsien Loong said the government wanted to promote "constructive competition" and it would be a "managed" process.

"It is quite a delicate balance because if you have too much competition, it may or may not work out well," he said.

"The newspapers, radio stations and TV stations may go for scandals and sensation instead of serious news and compete on the way down, which has happened in many places," he said.

"But of there is no competition at all, you sit back and may feel a little complacent and then the quality may go down, too.

"So we want to have some competition."