The internet affords its users an unprecedented level of contact with people from other cultural and social groups. It is often assumed that because of this it can facilitate intercultural communication and reduce the perceived distance between cultures. This article will examine this assumption by exploring two questions. Firstly, do the characteristics of computer-mediated communication (anonymity, absence of visual cues, etc.) facilitate intercultural communication and reduce distance and misunderstandings, or do they increase disparity between cultures and reinforce cultural stereotypes? Secondly, does the internet favour cultural globalization or cultural variation? Through several examples and case studies, two contrasting tendencies will be identified. The internet can favour cultural standardization, for example, through netiquette--a set of communicative rules which reflect a certain North American communicative style. However, cyberspace can also reinforce cultural variation, especially when the internet is used by diasporas. (Contains 1 table and 4 examples.)