Networking, social and otherwise, in Davos

Michael Hedges February 2, 2009

Location, of course, plays to the advantage of the World Economic Forum being in Davos, Switzerland. It’s tough getting there. Ten hours by train from Geneva when the helicopters are all booked. Even at that the WEF seems a million miles from anywhere, which is, of course, the point.

Credit WEF founder Klaus Schwab for principled capitalism. To assemble the world’s rich and powerful for a networking and not to forget public relations event make them pay. And the WEF adapts; more heads of state and fewer bankers this year.

Ubiquitous this year was News Corporation CEO Rupert Murdoch who opened the show Wednesday morning preaching to the choir. “Don’t let’s lose sight of what creates wealth in this world: it is open markets, it is capitalism.” Perhaps his words will be enshrined on the Wall Street Journal’s masthead. Perhaps they already are. He owns it.

In keeping the family tradition at the WEF – rich and powerful people are, well, like one big happy family – the whole Murdoch clan turned out, or many of them. Wendi Murdoch – the current wife – hosted a dinner on women’s issues with PepsiCo CEO Indra Nooyi. Daughter Elisabeth, with husband Matthew Freud, attended all the parties. Most touching was the sight of Rupert and son James enjoying a fondue Tuesday night before the show started in earnest. News Corporation, again, was a major WEF sponsor.

Murdoch – The Elder – closed his first day remarks with a warning befitting the 16th century Swiss Protestant reformer John Calvin. “We’ve been living in the Western world way above our means,” he groused. “We’ve been on a great binge and it’s come to an end.”

Characteristically to the point James Murdoch, who is chairman of News Corporation Europe and Asia, said Sky Italia has created ten thousand jobs over four years. “Sky Italia has done a great job… despite the competition.” Leaked elsewhere, News International will begin shedding newspaper jobs in the UK and Australia. No singing, no dancing.

If capitalism’s elite were suitably polished in words and appearance, heads of state became rich targets for public relations lessons and, of course, fees. Russian Federation Prime Minister Vladmir Putin jabbed at the heart of capitalism in opening remarks. "From this rostrum, we heard the words of American representatives about the fundamental stability and cloudless prospects of the US economy,” he recalled. “But today, the pride of Wall Street, the investment banks, have virtually ceased to exist.” Keeping with the Davos custom of interchange among the rich and powerful, Dell Computer CEO Michael Dell asked Mr. Putin how the IT industry could help Russia. “We don't need help,” flashed Mr. Putin darkly. “We are not invalids. We don't have limited mental capacity.”

Back in Moscow one day later, Russian Federation President Dmitry Medvedev was meeting with Novya Gazeta editor in chief Dmitry Muratov and part-owner Mikhail Gorbachev. Novya Gazeta has had four journalists murdered on the mean streets of Moscow in as many years and Mr. Medvedev enjoined his critics to express condolences. Moscow Carnegie Center’s Masha Lipman, quoted by RFE/RL, called the gesture “very unusual.” While the cat’s away the mice will play?

Mr. Medvedev tended the Russian home-front and did not trek to Davos. Fewer Russian billionaires were in evidence. Apparently, Davos is too small for more than one Russian. One who did attend was aluminum and mining billionaire Oleg Deripaska, who is not known to have media interests. He was, however, reported to be interested in English football.  

Chinese premier Wen Jiabao was a bigger hit with the rich and mighty, quoting Adam Smith liberally at one of the equally famous private sessions. He, like Mr. Putin, went on to chastise the West and capitalism. Earlier Mr. Wen’s motorcade blocked Mr. Putin’s motorcade on the narrow Davos streets creating somewhat of an impasse.

Journalists attending, particularly those filing for business and financial media, were hard pressed for headlines from business leaders without the words “grim,” “crisis” or “disaster.” The exception was the “irrational exuberance” of CNBC’s non-stop coverage. Like News Corporation, CNBC was a major WEF sponsor. Of the more than 7,000 temporary residents of Davos, journalists and media crews outnumbered delegates two to one.

Heads of state, however, continued to provide fodder. Turkey’s Prime Minister Recep Tayyip Erdogan famously, now, stormed off stage during a debate with Israeli President Shimon Peres (January 29). Mr. Erdogan said he’d never come back, in the heated moment. He accused the moderator, Washington Post columnist David Ignatius, of cutting short his speaking time. After a hastily called press conference with WEF’s Schawb meant to show all were still friends, Erdogan flew back to Istanbul and something of a hero’s welcome, echoed throughout the Middle East, as “Conqueror of Davos,” or so said supporters signs at the airport.  All politics are local, yes? Shades of ‘Mission Accomplished,’ no?

Mr. Erdogan has waged war with Turkey’s critical media, particularly Dogan Yayin Holdings (DYH), publisher of Hurriyet. Last year DYH CEO Mehmet Ali Yalcindag hosted a special ‘Turkey 360’ night at Davos. This year Mr. Yalcindag was nowhere to be found.

In addition to all the special moments WEF launched an exclusive social networking site for the rich and powerful called WELCOM. Don’t bother trying. You can’t get in without a very expensive password.

The WEF struggles to rise above several uncertainties. It’s two founding platforms, globalization and capitalism, have louder and louder critics. Too, it’s simple demographics. The vast majority of paying delegates are male and over 60. I mean, Rupert Murdoch is 77…but spry as ever.

The younger set are, generally, the media techies; rich to be sure, but far more interested in toys and tricks than big issues like the survival of global economics. “We want to push people to share more and more information,” said FaceBook’s Mark Zuckerberg, “because we think people will evolve to use more and more of these things, which is why we want to go to mobile. “

“It is just a matter of evolution,” said Microsoft’s Craig Mundie.

Evolution or not, the techies need money and consumers are, well, pressed at the moment. If the bankers were hiding out on recommendation from their public relations experts, the next usual stop for those hunting money are the private equity firms. And there was good news, however cautioned, from the dean of private equity Henry Kravis, founding partner of KKR. “Private equity is not dead,” he told a panel on global finance. “There’s going to be a real need for private equity.”