This is another plot gap between II and III:
Michael certainly would not let the Olive Oil Business simply slip away in '58 just because Frankie betrayed him.He needed it. He'd appoint a successor immediately (although I understand why FFC didn't want to make a very long movie longer by showing that succession). Zasa would have been way too young (he looked to be about 40 in '79). Altobello wins by default among some posters here. But, Altobello would have been a contemporary of Vito's to have been honored by becoming Connie's godfather--no way would Vito have bestowed that honor on an up-and-coming button man in his 20's. And, Michael treats Altobello too respectfully for him to have been a subordinate to hyper-controlling, contemptuous Michael.
I don't have any better idea of who Altobello was, and why he turned on Michael, than I do of why Michael wanted Immobiliare.
Another thing: If he was some respected contemporary of Vito, a man who apparently "kept the peace between Sicily and America", why is he not at the Don's meeting in I. If we give him being around the age of 30 when Connie is baptized, he'd be 5-6 years younger than Vito. So already in his 50s during the Dons meeting scene. We see he's based in Staten Island in III, and his close relationship with Michael and Vito implies he wasn't a Sicilian Mafia member - because, if then, also, where is he during Michael's time in Sicily? If he was truly some great friend of Vito's, why wasn't he helping protect his youngest son, if let us assume he was a Sicilian gangster of some apparently high level of clout?
The only thing I can honestly take from it, that makes sense, is that he was a smarter version of Pentangelli - a guy in the Family who was important - and with Michael edging further and further away from criminality after II, and not really interested in the drama in New York, Altobello was given a free hand to run the Family as he wanted to the point it became his in both name and everything, eventually appearing to semi-retire and grooming Joey Zasa as a front Boss. That's the only thing that makes it make sense for me, and why Zasa is a Boss but not on the Commission, why Altobello seems to have a close, mentor like relationship with him and acts as if he can control him, etc.
