Board Thread:Questions and Answers/@comment-13740085-20140322054844/@comment-13740085-20140420181641

Fed, I specifically laid out that it was Italy that betrayed the alliance due to the rampant irredentism in Italy (which is what caused them to betray the alliance otl). I'm sure Germany would welcome a stronger Austria, at the turn of the century, Germany saw their alliance with Austria as "strapped to a dying corpse". That, and that Austria had a ethnic German majority, and that Germany and Austrian relations improved greatly since the Austro-Prussian War, lead me to believe Germany would be more upset at Italy, rather than Austria.

As for Venice, the Italian army was retreating, Venice was only a few miles behind the front as this point, and vulnerable to naval bombardment. Whereas Milan was way farther away, and negated any naval involvement due to its inland presence. The Italians knew Austria would go for such a rich cultural and strategic point as Venice was, so they left what defenses they could, in favor of establishing more a secure and resistant defense at Milan.