In addition to the research 360i released a slide deck summary below.

• Microsoft won the Yahoo! search business only after: an attempted hostile takeover (though its arguable Microsoft was that serious about it as Yahoo!’s position as lead on a number of open source developments including PHP and Hadoop would raise anti-trust issues for Microsoft’s Windows, Server and Tools businesses) – this destablised Yahoo! causing a hemorrhaging of talent to Google and other players
• Microsoft then worked with shareholder activists (Carl Icahn) to unseat the board
• Microsoft also deployed lobbyists to have any potential Google deal declared an antitrust issue
• Microsoft gave Yahoo! Inc. a poor deal. No upfront cash and no real advantage
• Microsoft is in a monopoly position with its client Yahoo! Inc. Once the contract ends, Yahoo! can’t go to Google and Microsoft can name their own terms
• Microsoft has since closed Yahoo! out of distribution deals that it previously enjoyed
• Microsoft’s Bing search is still less relevant and provides a poor user experience compared to Google or even Ask’s Teoma. That is why Microsoft has had to buy search market share through the Yahoo! deal and through tool bar | search distribution deals
• Bing joins a legion of proof-points showing that the Microsoft innovation message put out as part of Microsoft’s core communications strategy is hollow. Yes, resources are given to innovation; but the outcomes don’t generally justify the term innovative ergo not innovation
• The Bing experience in Japanese is even worse

All of this would have been noted by Yahoo! Japan. However Yahoo! Japan has a number of shareholders to think of, and Yahoo! Inc. despite the commonality in the name is only a minority shareholder. Yahoo! Japan has an iron-lock in a number of sectors including local content, jobs, auctions, mobile and TV-based applications.

A poor consumer experience in search could let a competitor such as Microsoft or Google go after some if not all of these franchises. It would also affect Softbank’s broadband business and Yahoo! Japan’s mobile carrier | handset content relationships.

If Yahoo! Japan went along with a Microsoft search deal they would get screwed on the search revenue like Yahoo! Inc did. Why should Microsoft pay more for what they think they have coming to them already? Microsoft thinks that it has all the moves.

However, Yahoo! Japan – despite its name is a product of Japan, occupying one of Tokyo’s most prestigious business addresses, with a management team made up from some of Japan’s best entrepreneurs – at a time when Japan has little to be proud of in the technology sector.

All this at a time when Microsoft has come close to humiliating Japan’s Sony Corporation in the games console market and the disproportionate profit that Microsoft makes from Japanese computer makers through the monopolistic position of its Windows software licenses.

Then the Yahoo! Japan also has a compelling consumer argument in terms of the quality of the search experience. This could be a battle royale, pitting Microsoft money-fuelled lobbying and bluster against a Japanese national champion. And I hope that the Japanese cut Microsoft down to size.

• Addressing the disparity between business rates charged for optical fibre versus copper cables
• Revisiting the approach to the forthcoming 4G spectrum auction
• Addressing planning issues for mobile telecommunications base stations

More over at Left Foot Forward

The authors seem to think that Zuckenberg’s remarks about ‘Now for the first time we are focused on doing some specific things in specific countries’ was aimed at conquering these markets. Facebook would need to be very careful to avoid the graveyard of previous efforts by companies like Yahoo!, Google and Microsoft in these territories.

All of these markets have established communities on products and services that are in many ways superior to Facebook. They have cultures and online behaviours that are markedly different than peers elsewhere, in the case of Korea there are technical standards and three out of the four countries have unique legislative environments.

As Google and Yahoo! have found to their costs, success in China may bring a backlash in their established western audiences.

The challenging geographic focus steered discussions away from other factors that maybe affecting Facebook’s slower growth:

• How have privacy concerns affected their business? How has it affected engagement levels and the user utility?
• How does the user experience suffer from negative network effects of too much noise?  Try searching on a particular topic and wading through the morass of groups and pages now available
• Is Facebook now suffering from a lack of clarity of purpose as it has undergone service bloat?
• Are partners and collaborators concerned about being zucked?

Mary and her team at Morgan Stanley put together good thoughtful state-of-the-nation presentations. What is interesting about her latest presentation is two factors:

• How new successful entrants into the digital economy are not innovating to the same degree as incumbents (usually you would expect this to be the other way around)
• How economic factors overshadow future predictions on technological progressMS Internet Trends 060710

(via Business Insider)

My pre-election analysis of the Conservative technology report which James Dyson had a hand in didn’t allow me to drill down in sufficient depth on the ‘how’ aspect of their broadband plans and the manifesto contained even less detail.

Labour had nailed their colour to the mast with the Digital Economy Act and the paragraph in their manifesto promised more of the same. Their broadband plans had been mapped out pre-election with the finance bill and I had found them wanting.

I was surprised at how little the Liberal Democrats said on broadband and did not address their opposition to the Digital Economy Bill at all.

I won’t steal the thunder of the article, go and read it over at Left Foot Forward.

I asked Alex Hilton, a Labour parliamentary candidate about his opinion on the bill, to which he democratically replied:

I think it’s clear that there’s going to have to be another Digital Economy Bill in due course to tweak elements of this one.

It also underlines how much influence certain vested interests have in the governance of this country, that they can overwhelm so many voices.

That said, it’s good that there is some industrial policy finding it’s way onto the statute books and there are elements of the Bill that should be welcomed.

Lighter moments came out of the Digital Economy debate today with the online publication of a letter reputed to be from Labour minister Stephen Timms:

All this digital this-and-that seemed to have him a bit confused, but does beg the question why is he minister for Digital Britain? I am guessing that there mustn’t be that deep a bench of digital economy expertise in Westminster.