In this position paper the authors compare and contrast two large scale government initiatives to increase online learning in higher education. Both initiatives began around the same time and similar amounts of money were expended. In February 2000 the British government established the UKeU (UK eUniversities Worldwide Limited). The aim was to create ‘a single vehicle for the delivery of UK universities higher education programmes over the internet’. The Government allocated GBP62 million to the Higher Education Funding Council for England (HEFCE) for the project over the period 2001-2004. On 28 February 2004 the HEFCE effectively scrapped the UKeU after spending just on GBP50 million. UKeU had managed to attract 900 out of a projected 5, 600 students. A House of Commons Select Committee (March 2005) damned the experiment as a ‘terrible waste of public money’. At the beginning of 2002 the Swedish government also allotted a large sum of money (in total SEK470 million) to create the Swedish Net University. The Net University is still in existence and acts as a portal for students wishing to study online. Despite the name it is not a university with academic staff. A small number of technicians and administrators look after a website where students can search for and enrol in courses offered by universities who cooperate in the Net University venture. Its base consists of 35 participating universities. Online course offerings (subjects) have risen steadily from 1,000 in the first year to just over 3000 in 2007. Today about 80 full programmes have been registered. In this paper we study the reasons for the success of Sweden’s Net University and compare it with the failure of UKeU. In our conclusion we make a number of recommendations and point out some important lessons that can be learned from a comparison between two large scale government e-learning initiatives