KEY POINTS:
Telecom might have sought to introduce a group of Web 2.0 services on the weekend with its Yahoo!Xtra Bubble platform, but it has shown again that when it comes to the internet its thinking is decidedly old school.
Despite the precedents set by much larger internet companies like Yahoo! and Google, which regularly launch staggered beta programmes to make upgrades to services used by tens of millions of users worldwide, Telecom left itself with no Plan B should anything go wrong with its web services push. It then did an awful job of dealing with the complaints that followed.
Such is the importance of email to people these days that any outage lasting more than a few hours is virtually unforgivable.
The result is that Telecom has undermined its heavily advertised Yahoo!Xtra venture before it had a chance to get off the ground. That's a shame because what Bubble has to offer - free online storage, a revamped webmail platform and a Flickr Pro account - adds up to a reasonably compelling package of freebies for Xtra customers, especially those who don't use other free webmail services.
The fact that Telecom's Xtra email platform will now be hosted by Yahoo! in Australia isn't a startling revelation - much of our "local" internet traffic already takes convoluted routes around the world due to the de-peering of our major telecoms operators from local internet traffic exchange points and the cheaper costs in hosting websites in the US and Asia.
But hosting in Australia the content of customers of the country's biggest internet provider is hardly an efficient way of using available bandwidth capacity and won't do anything to ease the minds of Xtra customers worried about security and service reliability.
It has become obvious around the world that telecoms companies are not good vehicles to drive the development of innovative web services. For that reason, the sell-off of Telecom's internet arm, Xtra, would have made far more sense than the US$2 billion sale of the Yellow Pages group that was finalised in June.
As Google's model of providing technology-neutral web services independent of telecoms operators has caught hold, the importance of bundling web services with internet connectivity has diminished. I'm an Xtra customer, but I use Gmail for the bulk of my email, and my own web domain for email and online storage: Telecom merely connects me to the world for phone and internet use.
As webmail has become more sophisticated with the addition of instant messaging, clever search and archiving features and gigabytes of free online storage, the telcos have been left even further behind.
The separation of Xtra into a standalone company, possibly listed, was mooted by Telecom's management several years ago. Imagine the advances that could have been made by web developers focused 100 per cent on creating online tools that Kiwis want to use.
Instead we had for years the bland uselessness of the XtraMSN portal which received a large amount of traffic each month because it was the default web page for hundreds of thousands of Xtra subscribers and those signing out of Hotmail.
Telecom's internal efforts in the area of online retailing have likewise been uninspiring, with its Ferrit online mall failing to kick off the online spend-up the huge investment surely demands.
Elsewhere, the track record of other local operators in web services has been no better.
Witness the languishing platforms of internet providers Clearnet and Paradise, which have, from a consumer perspective, barely evolved since they were brought into the TelstraClear fold in 2001.
At least by aligning itself with the Yahoo! web services giant, Telecom by default has a foot in the Web 2.0 camp. The question is, after the Bubble fiasco, will Xtra customers have any appetite for what's on offer?
