Whether it be chasing online eyeballs or trading for silk and spices, the West has had a long fascination with expanding Eastwards. The lure is part growth fetish, part colonial fervor. But there is a catch. Unlike the Opium Wars of an earlier age, this time round the Orient may have the technology advantage.

Hang out long enough in LA, and you could be forgiven for thinking that Hollywood is an approximation of hell – people without talent chasing people with money without heart. Fortunately, it also happens to be a highly efficient machine for the creation and exploitation of
entertainment franchises. But as many are finding out the hard way – the Web, like love, changes everything. And the film industry will be no exception.

The outcome of the Kazaa case in Australia is a win for the music industry's slash and burn approach to peer-to-peer file sharing networks. On the face of it, their objections seem reasonable. Content creators should be able to protect their intellectual property, otherwise it
would be harder than it currently is to earn a living from singing, dancing or pretending to be able to do either. But there is more to it than that. What makes the record labels nervous is not copyright infringement per se, but any form of distribution that is not entirely within their control.

Following the tech market these days is a bit like watching a Japanese b-grade disaster movie. While Microsoft has long held the title as the heavyweight Godzilla, there is no doubt that the new 1000 pound gorilla is Google as King Kong. First it was search. Round one to the Kong.
Now, if you believe the hype – the next showdown will be over web operating systems.

Every time the Googleplex delivers another beta baby into the world, you can almost hear the ‘Do No Evil’ crew cheering as the Yahooligans groan. Their latest offspring is Google Talk, a product that straddles the converging technologies of Instant Messaging and voIP. No real
surprises here, but perhaps some more glimpses of the master plan.

If you are a portal, chances are your favourite parlour game is feature matching. Google buys Blogger, MSN launches Spaces. Yahoo moves into music and media, while Google seeks to dislodge Yahoo users from their core services in mail, search, toolbar, personalised home page, and news. Product development as New Economy Cold War.

But there is a kind of insane logic behind it. Although media analysts tend to get excited about page impressions and unique visitors, most of the lock-in power behind online media giants today is tied in with registered users. Getting people to give you an email address is one thing, but giving them a reason to come back every day is why communications and messaging platforms are so integral to portal strategy.

All of the portal players use their registered messaging users to drive adoption of other strategic product lines. MSN integrates its Messenger service with its blogging tool while Google requires you to create a gmail account in order to activate Google Talk. AOL has the biggest share of the messaging market in the US, but is well behind in terms of other services. Of all the players, Yahoo is probably the most advanced in terms of the deep integration between its various services and a powerful user identity management system.

Of course, there is a delicious irony in the fact that the portals of the world need to give away messaging to keep users, while Telcos give away almost everything else to hang onto their communications revenues. Inevitably the two business models must converge, but perhaps not in the way both parties would expect or prefer.

Portals would love a slice of the lucrative Telco dominated voice market. Already, Yahoo has started charging for voIP calls via its instant-messaging client. They acquired internet telephony services company Dialpad in June. But the real market leader in this space continues to be Skype, which by all accounts is being shopped around town for an astronomical acquisition price.

VoIP is a classic disruptive technology, but with a twist. The way most voIP players commercialise their networks is by providing integration with the Telco legacy system. Talking to your other friends on Skype is free, but if you want to terminate calls on the old fashioned telephone exchange, or want a normal phone number that connects to your Skype account – that's when the cash register also starts to ring.

Eventually that business model breaks down when there is just one data pipe which carries a bit of everything. The owners of the pipe, which may or may not be today’s Telco operators, will take a cut for transport, while portal and platform operators will make money from bringing users to the system and advertising.

That raises the interesting question about whether there will be a convergence of messaging and talk platforms. After all, the fact there is a pretty standard international phone system is the reason that the network as a whole is useful to people. At the time of the launch of Google Talk, Skype announced that it was opening up an API for developers. That announcement was in response to Google’s claim that its entire messaging service is built on an open instant messaging and voice over IP service built using Jabber/XMPP technologies.

So does all the fuss about platforms really matter? Maybe to third party developers – but as anyone knows who has used a cross platform like Trillian before, it is easy to message people on other platforms, but you miss out on all the clever integration and services which come with a portal specific service.

Ultimately that is the paradox of many network based systems. In the long term everyone benefits from an open platform, a clear standard, and total interoperability. The short term is another story. The most strategic game to play is to keep your registered users close, and your competitor’s users even closer.