In November 2001, Yahoo Inc. and AT&T (the RBOC formerly known as SBC) announced a "landmark strategic alliance" that would link the telecom and Internet worlds together.

This morning, the Wall Street Journal reported here http://online.wsj.com/article/SB117340663471431826.html?mod=home_whats_news_us

that the alliance is in serious trouble because now AT&T no longer needs Yahoo the way it did nearly six years ago, when it was struggling to acquire broadband customers.

The situation illustrates how fragile partnerships can be between telecom carriers and large software companies.  Why does this happen???  The answer is simple.  Because, strategic interests diverge over time.

In this case, broadband in suddenly in demand and AT&T now wants to keep 100% of it’s subscription revenue.  Bam!  Take that!

Of course, the interesting question is how far is AT&T willing to go to leverage their new found strength?  Will they innovate and take control of their own destiny?  Will they make an effort to innovate new products and services on their own?  Will they evolve their broadband platform to deliver integrated communication and software service bundles?

Or will AT&T toss Yahoo aside and accept payment from Google which would, yet again, relegate their broadband platform to commodity status?