1. Secure overall user experience quality (solve a coordination problem by vertical integration)
2. Change how mobile phones are sold in the US (first choose phone, then choose carrier and subscription)

It seems like they didn’t succeed with reason #2. Google is now changing the distribution model for Nexus One, and will use traditional channels.  Mobile operator’s can do more than providing wireless access to the Internet. Google’s blog post emphasize that many customers like a hands-on experience before buying a phone.  I have to say that I’m more likely to get a Nexus One after trying it.

John Paczkowski in Digital Daily commented:

So was Google’s strategy for the Nexus One doomed from the beginning? Probably. Customer behavior is a tough enough thing to change. Disincentives like Google’s questionable customer support and a pair of early termination fees on a device Google was asking us to buy without even touching it certainly didn’t help.

I think that Google also has considered their strategic signals towards manufacturers of Android devices. Google’s vertical integration to create a Google phone is not unproblematic in this strategic interaction. They are changing the soon to be closed Nexus One store into a showcase for Android devices.

From retail to viewing. Once we have increased the availability of Nexus One devices in stores, we’ll stop selling handsets via the web store, and will instead use it as an online store window to showcase a variety of Android phones available globally.

This seems like a sound decision.

His points on beta testing were new to me, and I really like his slide deck.

1. Cory Doctorow: Why I won’t buy an iPad (and think you shouldn’t, either)
2. John Gruber: The Kids Are All Right. In short: He disagrees with Doctorow
3. Jim Stogdill: The iPad isn’t a computer, it’s a distribution channel
4. Umair Haque: Apple’s Strategic iParadox
5. Mark Sigal: Grumpy old men, the “Inmates” and margins – iPad, iPhone and the future of computing
6. Tim Wu: The Apple Two

• Wireless call quality has dropped in the US according to Business Week. Why? Smartpones are putting strains on the networks.
• Erik Schmidt spoke at MWC and stated “”I feel very, very strongly that we depend on successful businesses for the operators globally and I disagree that we are trying to turn the operators into dumb pipes” (via Guardian.co.uk)
• YouTube Will Kill Flat-rate Mobile Broadband Pricing Forever according to GigaOm
• Associated Press reported that Spain’s Telefonica considers charging Google
• etc, etc.

So what is the issue here. Google develops more and more services for mobile phones. Apple has succeeded with their iPhone and basically control all what used to be called value added services. Mobile operators compete on data plans – probably as a loss leader to secure revenue from voice. If we add wireless net neutrality and regulated low termination rates for mobile voice (or even bill and keep), the situation does not look to bright. They have to start real charging for  or at least versioning their data plans (within any present net neutrality regulation)

1. Secure overall user experience quality (solve a coordination problem by vertical integration)
2. Change how mobile phones are sold in the US (first choose phone, then choose carrier and subscription)

Nexus One has a great screen and a fast processor. I expect that Google has focused on the overall user experience. Consequently, the device can serve as a best practice example for an Android device. Financial Times’ John Gapper describes how Apple is “half closed” and Google is “half open”. Even Google must compete with Apple’s user experience gurus.

Jon Stokes commented in Ars Technica that Google’s biggest announcement was not a phone, but a URL. As a Norwegian, it is easy to forget how different the US mobile phone market is from what I am used to. Mobile operators have almost turned complex price plans, phone subsidies and lock-in periods into an art to capture consumer surplus. Google is according to the article, the first carrier-independent smartphone store in the US. First you pick your phone, then you pick your carrier and subscription. It seems like a clear message from Google to the mobile operators: Guys, just compete on price/quality of wireless Internet access. Let us and others fix the rest.

• FCC rulemaking process on network neutrality [PDF]

• Apple´s AppStore policy on applications such as Google Voice and political satire

• How Facebook for a short period unlinked Twitter links

• Murdoch’s threat to take the Wall Street Journal out of the Google search index

• The openness and standardization of mobile platforms

Most of these issues are raised in Tim O’Reilly readable blog entry on “The War for the Web”. (and the title of this blog post is found somewhere in his post).

The future of the Internet – or its ability to sustain the generative aspects – is dependent upon interplay between technological, business and policy development. Personally, I like Abramson (2005) short description of how these domains interact:

Technology constrains what we can do, legal rules change the alternatives’ relative cost, and economic incentives indicate which alternatives we are likely to choose (Abramson, 2005, Digital Phoenix, MIT Press)

So, what will 2010 bring? I expect that the “openness” of the Internet will still be a recurring theme. My predictions are that

• Net neutrality will not become a major issue. Proposed regulations are aligned with access providers’ incentives
• Compatibility and interworking between different Web 2.0/Internet companies will be the major issue

Maybe I should just reread Information Rules and Finding of the Facts in the U.S. Microsoft case  to prepare 2010?

The web is still unrestricted and free, and so I am returning to my roots as a web developer. In the long term, I would like to be able to say that I helped to make the web the best mobile platform available, rather than being part of the transition to a world where every developer must go through a middleman to get their software in the hands of users.”

The story is picked up by The Future of the Internet blog.

JZ [Jonathan Zittrain] argues that the PC and the internet have been the perfect combination for generativity. The internet itself could itself be a solution to the control of mobile platforms. But these pieces point out, yet again, how even that combination isn’t untouchable unless we’re constantly, actively working at it.

I agree with Zittrain that the combination of devices anyone can make applications for, and the Internet at least as we are used to, has enabled rich innovation. This is something valuable we must continue working at.

Yahoo Go is probably the victim of both poor strategy and execution. The application itself never impressed me.

I haven’t used Yahoo web portal in ages, but took a brief look at their new web site recently. The site used to be the Internet equivalent to TV channel packages as brought to you by your cable or satellite TV provider. Now it looks more like your own mash-up of web sites.

The web will continue to be the platform, but I do not know what a portal look like. It won’t be like Yahoo Go, but is the new Yahoo web site the way to go?

Google chief executive Eric Schmidt favors net neutrality, but only to a point: While the tech player wants to make sure that telecommunications giants don’t steer Internet traffic in a way that would favor some devices or services over others, he also believes that it would be a terrible idea for the government to involve itself as a regulator of the broader Internet.

“It is possible for the government to screw the Internet up, big-time,” he said. Google is strong enough as a company to weather any possible outcome on the issue, he said. But what he worries about “is the next start-up.”

It is rather obvious that anyone wants competition or regulation that prevents complementors from extracting monopoly profits, or just limit their complementors’ strategic levers. Or, from another perspective, the openness of the Internet is good both for business and public welfare.

The openness of the Internet is about more than traffic management in the access network, and Google’s Data Liberation Front seems to be a good thing. Let’s hope that the recent TechCrunch story on Orkut is an one time incident.