This week’s closure of Telecom’s Ferrit should come as little surprise. As Telecom has done in the past, business units have been set up presumably with the notion of reinforcing their dominant telecommunications position.

But while Telecom is driven by their own sense of power in the market, they are also captured by a relentless need to return value to shareholders…now.

The Ferrit demise mirrors the DotCom boom-and-bust seen in the US during the late 1990. Vast quantities if investment money went into start-up e-commerce websites where massive amounts of money were placed against creating databases of people where it was hoped they would become valuable customers. Problems arose when it was realised that the databases did not necessarily represent valuable long-term revenue. As a result the investors lost their nerve and pulled the plug.

Some questions. Why did Telecom;

·         Want to compete against other online retailers and street retailers, many of whom were their telco customers?

·         Expect to create a killer online community when all they had to spend was $200m (apparently) ?

·         Not realise that the best new web developments are coming from people with good ideas and little money to invest?

·         Use such dim-witted advertising with no good marketing strategy?

·         Figure out that too many people mistrust Telecom and won’t want to extend their habits into retail therapy with them!

Here’s another couple of questions someone might like to answer:

·         Whos idea at Telecom was it to build Ferrit?

·         What was the Board thinking when it supported management into this adventure?