Frank Rose writes about "The Civil War Inside Sony" in the February Wired. One of the reasons for having big firms was that they could rationally decide what to do when there were large spillovers and externalities by which the activities of one department affected another. Rather than relying on complicated bargaining or on the legal process, you would simply hire bosses who would decide what to do.

In the case of Sony, however, the fact that it is both a media-content company and a consumer-electronics company seems to have produced... paralysis.

Wired 11.02: The Civil War Inside Sony: What's changed since the original Walkman debuted is that Sony became the only conglomerate to be in both consumer electronics and entertainment. As a result, it's conflicted: Sony's electronics side needs to let customers move files around effortlessly, but its entertainment side wants to build in restraints, because it sees every customer as a potential thief. The company's internal divisions reflect those in the marketplace, where entertainment executives have declared war on consumers over file-sharing. But Sony's position is unique. It can settle the fight and flourish, or do nothing and be hobbled.

Instead, it's tried to play both sides. As a member of the Consumer Electronics Association, Sony joined the chorus of support for Napster against the legal onslaught from Sony and the other music giants seeking to shut it down. As a member of the RIAA, Sony railed against companies like Sony that manufacture CD burners. And it isn't just through trade associations that Sony is acting out its schizophrenia. Sony shipped a Celine Dion CD with a copy-protection mechanism that kept it from being played on Sony PCs. Sony even joined the music industry's suit against Launch Media, an Internet radio service that was part-owned by - you guessed it - Sony. Two other labels have since resolved their differences with Launch, but Sony Music continues the fight, even though Sony Electronics has been one of Launch's biggest advertisers and Launch is now part of Yahoo!, with which Sony has formed a major online partnership. It's as if hardware and entertainment have lashed two legs together and set off on a three-legged race, stumbling headlong into the future.

This is not how it's supposed to work...