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Letter From Davos

The founder of Red Herring and AlwaysOn traveled to the World Economic Forum annual meeting and reported back to Technology Review’s editor, Jason Pontin.

Rarefied Air
The annual meeting of the World Economic Forum, 2005
“Taking Responsibility for Tough Choices”
Davos, Switzerland, January 26-30

January 26, 2005

My dear Jason,

As you know from having made the pilgrimage before, the World Economic Forum adventure begins well before you arrive in Davos, especially if you are traveling all the way from California. Swiss International Air Lines stopped flying direct to Zürich from San Francisco, so I had to make two stops. This year I went through Washington, DC, an eventful choice because we picked up FCC chairman Michael Powell and the fur-coated secretary of labor, Elaine Chao. Secretary Chao is the highest-ranking U.S. official attending the WEF meeting this year. Interestingly, as a cabinet member, Ms. Chao traveled with three bodyguards, whereas Chairman Powell had none.

I have gotten to know Michael Powell pretty well over the last couple of years; he has been blogging for AlwaysOn for a while now. Michael was the first and is still the only major government figure to mix it up in the blogosphere, and he is good at it. Just prior to leaving for the forum, he announced that he would be relinquishing the job of FCC chairman in the spring, but he promised to blog on as a private citizen. “Blogging allows me to step over the heads of the lobbyists and the Beltway press and go direct to the techies and get their unfiltered opinion,” he beamed as we glided across the Atlantic. I told him that a third of his traffic comes from Howard Stern’s website.

Touching down in Zürich does not mean the journey is over. One must still choose between a train (with two transfers along the way) or a WEF-sponsored bus. Both take the better part of three hours, and even then there is a taxi ride before you finally arrive at your snug hotel quarters in the sleek little ski village where the forum is held. This is your travel itinerary, of course, if you are not one of the Google founders who flew their shiny new jet to the forum this year. I am certain the boys skipped the bus ride and rented one of those black helicopters that for a few thousand bucks rocket you from the airport and plop you down in the village square in less than 20 minutes.

Like the rest of Old Europe, WEF has its own caste system that all attendees are well aware of but no one really talks much about. First you must get an invitation. The wizard of WEF, Klaus Schwab (founder and executive chairman), and his fabulously courteous yet inscrutable team of munchkins ultimately determine who gets to go. The supply of global players who want to attend far outstrips the supply of available spots, so one has to be either the president of a country, a monarch, the CEO of a big paying corporate sponsor, the editor in chief of a million-plus-subscriber publication, a Nobel laureate, a rock star, or Angelina Jolie. Politically astute smaller-company CEOs, venture capitalists, and other key influencers can get in, but that usually requires a powerful WEF member to whisper a personal recommendation into Klaus’s ear. And even if Mr. Schwab gives you the nod, you still have to pay $37,000 for your membership fee and $28,000 for your annual ticket.

Paying members and corporate sponsors underwrite Klaus’s impressive list of guest members, including leading artists, authors, scientists, scholars, and public figures. Huddled in the media corner with the CNN and BBC crews for much of today (we are “video-blogging” several of the main sessions), I watched a stream of world leaders drop by to smile for the cameras. It was like watching all the most talked about people in the world—the new Palestinian Authority’s president Mahmoud “Abu Mazen” Abbas, President Viktor Yuschenko of Ukraine, and Nobel laureate Shirin Ebadi—get interviewed in your own living room.

“Members” wear white badges that allow them to roam free, have tea in designated areas in the Congress Center, and sign up for special lunches and dinners held at the few dozen hotels that sprinkle the village. Your conference bag also comes stocked with an HP iPaq Pocket PC that provides wireless e-mail access to all attendees and the ability to remotely sign up for the private events. Lower in the caste structure are the “working journalists,” who do not pay but must wear bright orange badges so world leaders know to watch what they say when they are around. If you are on the WEF staff, you wear a blue badge, and you are, more often than not, young, handsome or beautiful, and completely charming. I have to admit that, once you find yourself on the inside, as I have been blessed to be for the last nine years, it is a happy and orderly place, no matter your status.

The World Economic Forum’s mission is to “improve the state of the world,” which is lofty enough to satisfy the 2,000 global egos that fit into the main Congress Center every winter. Mr. Schwab also comes up with an annual theme, doing his best to capture if not influence the global zeitgeist. This year the theme was “Taking Responsibility for Tough Choices.” I never really figured out what choices we had made for which we now had to take responsibility, but Mr. Schwab did make a general call to “take immediate action on the tough issues of poverty, climate change, education, and equitable globalization.”

Of course, as seasoned attendees know, there is the stated theme, and then there is the real theme that emerges from the forum. The unwritten theme at the World Eco­nomic Forum annual meeting two years ago was “We do not like America.” The theme last year was “We still do not like America.”

In 2003, the meeting was held just over a month before the alliance went to war with Saddam. President Bush dispatched internationally popular secretary of state Colin Powell to Davos that year. “Time is running out. We will not shrink from war if that is the only way to rid Iraq of its weapons of mass destruction,” Secretary Powell told a very skeptical crowd. In 2004, the Bushies dispatched Vice President Dick Cheney to Davos to assure folks that the U.S. wasn’t going to march the troops into Iran. “We’re hopeful [about] the effort by our European friends—the Germans, the French, and the Brits have been most directly involved­—working with the Iranians, to try to get the Iranians to agree to a more intrusive inspection regime,” Cheney explained.

For an American, attending the forum in those years was a wearying and disheartening experience. In my view, the schism was about much more than the unpopularity of the Iraq War. The United States is the world’s sole superpower. The Iraq War was one example of how the U.S. can and will act unilaterally. That reality is understandably unsettling for many non-Americans.

This year, I was pleased to arrive in time to catch Prime Minister Tony Blair’s address. He is a splendid public speaker and was in top form as he defended President Bush’s call to advance Middle East peace. “America accepts that terrorism cannot be defeated by military might alone,” he promised.

Well, it has been a long day, and it turns out that President Chirac has bailed due to weather and is beaming in via satellite, so I am going to watch on the closed-circuit channel WEF provides on my hotel TV. Mr. Chirac is not a favorite of mine.

Your affectionate uncle, TP

January 27, 2005

My dear Jason,

I woke up this morning to read a report saying that after making his formal remarks last night, Mr. Blair put on a polo shirt and a pair of jeans and sat around his hotel suite drinking beer with a few reporters from the Wall Street Journal. He used the occasion to take another whack at explaining President Bush’s foreign-policy vision, as part of a wide-ranging interview that appeared on the front page of the Wall Street Journal Europe. “I am shocked, occasionally, at how some people view [the U.S.] today,” Prime Minister Blair told the editors.

By midday it was clear that Prime Minister Blair’s remarks had made a powerful impact on the forum members. Even certified Bush bashers like Sun’s chief researcher John Gage “loved” Tony Blair’s remarks.

There was, of course, another big reason the WEFers weren’t banging on America. Folks are too busy going gaga over the celebrities, including three of the biggest stars to have ever walked a red carpet: Sharon Stone, Richard Gere, and Angelina Jolie. True glamour has finally shined its light on Davos.

As I was hunkered down in the press lounge, I noticed this ­little Irish dude with sunglasses and hair slicked back who rushed by me with a blond babe trailing behind him. He had a leather jacket with fur sticking up around the neck, and his chest was all puffed up, and I started thinking, Hey, that guy walks like a rock star. Actually, the guy was a rock star: Bono. And if that wasn’t enough, I looked up again and saw Lionel Richie. What is Lionel Richie doing here?

The beautiful people were here to use their star power for social change, of course. Angelina Jolie, who was called the “sexiest woman alive” on the cover of Esquire magazine, is all about drawing attention to humanitarian crises in Chad, Sudan, and Sierra Leone. Bono cares about poverty in Africa too, and Sharon Stone and Mr. Gere are all about raising money for the runaway AIDS epidemic. It was all so bright and glittery that I was truly at a loss as to what it all meant.

Thankfully, I ran into one of my Davos cronies, the other rock star in the house, Peter Gabriel, and asked him to sort it out. “I actually have a theory about that,” Peter said, to my relief. “The role of celebrities is just like that of the Greek gods. When Margaret Thatcher was no longer our prime minister—and it is not like I agreed with any of her policies—I kind of missed her. But it was not about the Nanny State, it was about the Mommy State.” Peter was getting a little Freudian for my taste by this point, but I encouraged him to go on. “Celebrities, Greek gods, Margaret Thatcher—they are like our parents. They protect us from having to look into oblivion. It is like having a golden roof over our heads. We look up to them so we don’t have to face reality. It is a way to hide from our real fears.”

Well, I could agree that Angelina Jolie was a Greek goddess. My business partner Vassil Mladjov and I watched her walk back and forth for interview after interview, always calm, collected, and stunning to look at. Even my wife, Nicole, chided me by phone from across the world; she said I should go up to Jolie, drop a few names, and try to get a snapshot. I am sorry to say I let us all down. It took all the courage I had just to take a photo of her on one of her many jaunts down to the press room. Later, I enjoyed hearing from Google CEO Eric Schmidt what it was actually like to sit next to the star of Tomb Raider. “She has this amazing, rather large forehead,” he started. (Only a true geek would start out by marveling at a big forehead.) “And she has these lips that are almost surreal,” said Eric. “God surely broke the mold, because there is no one like her,” Eric concluded, and everyone listening nodded and giggled.

From my seat, Ms. Jolie looks like the real deal. After all, she did adopt a Cambodian orphan, she donates one-third of her income to charity, and she wins praise from United Nations officials for her hard work. Eavesdropping on her interviews, I heard her say, “Celebrities have the responsibility to know exactly what they are talking about and to be in it for the long run.”

But Sharon Stone wasn’t about to let Ms. Jolie steal all the headlines. Two hours after my chat with Peter Gabriel, in the midst of an earnest debate on “funding the war on poverty” in a packed Congress Hall, Sharon Stone suddenly rose to her feet and pledged $10,000 to combat malaria in Tanzania, to the delight of the Tanzanian president, Benjamin Mkapa, who was one of the speakers. Stone then asked if others in the audience would care to help the cause. In the end, Ms. Stone’s antics raised over $1 million from 30 people.

By the evening, I was hanging with my Davos posse—Michael Dell, Accel Partners’ Joe Schoendorf, Hasbro’s Alan Hassenfeld, and novelist Paulo Coelho, the author of The Alchemist—at German media mogul Hubert Burda’s party. Old Hubert holds his soirée at the Belvedere Hotel, and this year it was right next to the Forbes party. And I have to say Hubert kicked the American publisher’s butt in both attendance and fun.

For the tech crowd, the big gossip in Davos was the meltdown of Hewlett-Packard’s top dog, Carly Fiorina. Three successive bad articles in the Wall Street Journal and a trashing on the cover of Fortune made her dance like Michael Jackson. “I think the Fortune article was well done,” Michael Dell told me. “But she is tough, so I don’t think she is going down.” I asked Michael if he thought that the HP-Compaq merger had been a failure. “I stand by my original position,” he said. “The HP-Compaq merger was the best thing that ever happened to Dell.” [At the request of HP’s board, Fiorina resigned shortly after returning from Davos.]

As the end of the evening was upon us, I tucked myself into bed to rest up for the next full day.

Your affectionate uncle, TP

January 28, 2005

My dear Jason,

Tonight is the night for the annual Accel Partners/AlwaysOn/Google cocktail party at the wonderful Kirchner Museum, directly across the street from the Hotel Belvedere. My primary mission today is to remind everyone I see about the party.

But you asked me to write about the technology buzz here at Davos. A blogger at the forum reported that Eason Jordan, CNN’s chief news executive, said that some journalists killed by the U.S. military had been deliberately targeted. The story is unclear because no transcript or video of the panel where Jordan was speaking has been released. I wasn’t there at the time. But I am in the blogging business now, and my opinion is that we should cut poor Eason some slack. Bloggers have nothing to gain by looking like a bunch of vigilantes. [Bloggers’ outrage at Jordan’s remarks later forced the CNN executive to resign and has prompted much subsequent reflection on blogging’s role in politics: see “Mean Media,” p. 17.]

I think that, in terms of sheer impact, Bill Gates is the biggest celebrity at Davos. Just before Mr. Bill (who served as a cochair of the WEF meeting this year) showed up in Davos, the Bill and Melinda Gates Foundation announced that it was giving $750 million over 10 years to the Global Alliance for Vaccines and Immunizations (GAVI). GAVI will use the new funds to improve the delivery of basic vaccines, such as those against diphtheria, measles, whooping cough, tetanus, polio, and TB. With an estimated 27 million children in the developing world going without basic immunization each year, the World Health Organization estimates that $8 billion to $12 billion is needed.

For me, the highlight of Davos this year was sitting front and center in a packed press conference with Tony Blair, Bono, and Bill Gates. Gates is also on a mission to encourage folks like Prime Minister Blair to pony up for an international fund that could help pay for the distribution of these vaccines. At the conference, Bono praised the enormous contributions Gates has made to children in poor countries. It’s true that Bill Gates deserves a lot of credit for getting the world to recognize that pharmaceutical companies view vaccine research as a low priority­—at least when the target market is the developing world.

I have to admit, it is much more inspiring to listen to Bill Gates speak about world health-care issues than about IT. I swear I’ll croak if he ever brings out that Tablet PC again. He’s intellectually engaged in the medical research he’s funding. As you know, Mr. Bill has been coming to Davos for years, and when here he likes to wear his foundation cap.

After edging my way out of the Gates press conference, I had to hustle over to the big party at the museum. Joe Schoendorf and I have been throwing the “Silicon Valley meets Davos” party for eight years. Google became a coconspirator two years ago. But while it may have a strong tradition, and Google makes us hip, it is Joe’s wine selection that really attracts all the big dogs.

Given the recent tension over Middle East policy, we have hosted a nightcap discussion with Shimon Peres for the last two years. He was there again this year.

“Two years ago, one month before we went to war with Iraq, you said if Saddam did not give up, taking him out was going to be the right thing to do. Do you still think that was the right decision?” Joe asked the former Israeli prime minister. Peres stuck to his guns: “This was not a war about the religion of Islam; it was about fighting a terrorist state. The coalition had to move quickly against Iraq.” Al Gore was sitting in the audience and was not too happy with what he was hearing from the man whom he had minutes earlier given a huge bear hug. Gore had his arms crossed and rolled his eyes.

So by the end of the evening, it felt as though the forum had come full circle and was focused back on Iraq. In two days the Iraqi citizens would have their first free election in more than a half a century. There was hope and promise in the air. I think the tragic tsunami that hit the Indian Ocean and surrounding countries a month earlier, and the outpouring of global support that followed, were also external events that helped shape the themes of this year’s forum. They showed that if you bring enough media light to an issue, whether by the advent of a natural catastrophe, the smile of a Greek goddess, or a billion-dollar donation, the world can nudge those almighty rich countries to start giving to the poor countries in a big way. May God bless the world.

Your affectionate uncle, TP

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