At NextMadisonAve Michael Hurt from Microsoft suggested that people take a look at Porter's Strategy, which is largely viewed as a definitive work on corporate strategy.  For a really interesting look at why some strategies succeed and others fail, especially when it comes to new technologies, I would suggest folks check out Michael Raynor's The Strategy Paradox, which includes in particular a discussion of why Microsoft has been so successful over the years.

Mr. Hurt admitted that Microsoft has to struggle with the idea of whether it is a software company or an internet company.  He also used the term "audience company" but I think one still needs to account for the idea of where one thinks the audience is, and many strategy scholars would see successful strategies as being built on a bet about where the audience is: the desktop or the internet, for example. Raynor points out that the beauty of Microsoft has been that senior management (C-level and above) has created opportunities for developing businesses on both online, desktop, (and mobile, and video game consoles) so that they are not betting one one future shift.  A classic hedge.

See Raynor's book for more detail on how creating strategic options at the highest levels of an organization allows individual business units to focus on committing to a strategy and executing their bold ideas.

Raynor's work deserves more coverage; look for more summaries of his insights in future posts.

What is the essence of interconnection?  At NextNY's BizDev 2.0 in November 06 there was a great deal of discussion surrounding the ease with which data from one web service can rapidly be incorporated and leveraged into another- the widgetsphere and RSS are great enablers of this- without the need for "slow" business development activity. 

When this is successful it adds value.  Players with market power/lawyers often see this as disruptive "theft"- see myspace/photobucket or the recent "re-peering" of some major Belgian newspapers with Google (which I think we will come to see as just a passing fad in the protectionism of content, but who knows?)

I wrote a few days ago about the similarity of the myspace/photobucket issue to the peering battles between backbone providers.  "Peering" between sites on the internet
is something we take for granted in our web2.0 world, but I think we need to look at it the way backbone providers do, as an exchange of traffic (visitors instead of bits).  Peering may  be free, in the end, only for dominant providers.  At the same time, "dominant" may turn out to not mean much over the long run, and the market power of sites like myspace may  be nicely balanced by user backlash when appropriate.  I'm going to call all my posts about this "TheNetwork" as I examine the interaction between peering and web2.0.