FORTUNE: Davos Dispatches from the World Economic Forum  
Where old media still matter
High in the Swiss Alps, participants at the World Economic Forum discuss how the Internet has changed journalism.


DAVOS, Switzerland (FORTUNE) - Justin Fox reports: For members of the Old Media, Davos remains stuck in a blissful time warp where they still matter and there's no Matt Drudge or Instapundit or Daily Kos around to cause trouble. Genius that he is, World Economic Forum founder Klaus Schwab long ago swept the people who run the world's newspapers, magazines and TV networks into a tight embrace, and he's not letting go, at least not yet.

Editors and anchorpeople and famous columnists -- and even a few run-of-the-mill writers from particularly big and prestigious publications -- are treated as near-equals of the CEOs who actually pay to make this grand event possible every year. Is it any wonder that the WEF is regularly portrayed in the media controlled by these people as the most important, prestigious gathering on earth?

That the Davos ranks of "media fellows" have yet to be infested with bloggers from outside the media establishment is partly a function of Schwab's charmingly retro tastes -- he likes royals a lot, too -- but also a reflection of the fact that the mainstream media aren't quite as embattled outside the U.S. as they are within it. Not yet, at least.

That embattlement has, however, made it here as a discussion topic. The lunch I went to Wednesday featured a discussion titled "The Mainstream Media: Still a Fourth Estate?" It mainly consisted of speakers from said mainstream media saying that they thought they were still very important, but that these young folks have some disturbing reading and TV-viewing habits. BBC Director-General Mark Thompson was probably the most excited of the lot about the possibilities of the Internet -- probably not surprising given that he gets his money not from advertising or circulation revenue but from a government-mandated TV license fee.

The more interesting discussion, though, was the one at my table. Those sitting around it included Stefan von Holtzbrinck, CEO of the big Stuttgart-based publishing firm that shares his last name (its properties in the U.S. include Scientific American and Farrar Straus & Giroux); Newsweek senior editor and Katherine Graham progeny Lally Weymouth; Reed Business Information (Variety, Publishers Weekly, etc.) CEO Tad Smith; and, most intriguing of all, Niklas Zennström, the CEO and co-founder of telco-killer Skype (now a division of eBay), and before that CEO and co-founder of record-company-killer Kazaa. (Yes, it is pretty amazing who you can end up sitting next to in this place.)

I don't think it's fair to reproduce quotes from an informal lunch discussion, and I didn't take very detailed notes anyway. But you can probably guess where people came down: Holtzbrinck, Smith, and Weymouth all worried about a decline in standards and in quality as Internet rivals stole revenue away from big media.

Zennström said that the Internet made it possible to deliver information much more efficiently than before, so of course revenue had to drop. That's just progress. That's pretty much where Zennström left it. My wife, Allison Downing, an avid consumer of old media and new, launched into an impassioned defense of the evolving standards of the blogworld -- which, she argued, is much quicker to correct errors than newspapers or magazines are.

I went off on my own riff about how I love the interactive nature of Web-based journalism, but find it so seductive that it can get in the way of getting serious work done. The journalistic work of which I'm proudest has almost always involved dropping off the face of the earth for weeks on end and immersing myself in a subject. It has also often involved writing about subjects that weren't obviously interesting, but out of which I was able to weave reasonably compelling tales.

My sense -- derived from the e-mail response I get to stories like that -- is that an engaged, intelligent bunch of readers greatly values such work. I would hope this means there will still be a market for it however the media are configured. But I know I can get a much bigger and more immediate response on the Web to a short, opinionated essay that doesn't necessarily break new ground. My worry is that I will be seduced, or forced by the changing economics of the business, into emphasizing the latter over the former

Feedback: jfox@fortunemail.com

January 26, 2006

David Kirkpatrick reports: I got a chance to talk more about the issue of Google's censored Chinese Web portal with CEO Eric Schmidt last night in the doorway of a hotel in Davos, where he, I, Brin, and several thousand others are attending the World Economic Forum.

"Tell me something," he said. "Was the Cuban trade embargo effective? Is Castro still in power?" His point, of course, was that totally blackballing rogue or repressive regimes is not always the most effective way to change their behavior and benefit their citizens.

I also asked him to respond to the comments I posted along with Brin's from Human Rights Watch President Ken Roth, who had suggested that Google join with Yahoo (Research), MSN and other search companies and collectively refuse to censor results, on threat of quitting China.

"Has he ever heard of Baidu?" asked Schmidt. He said he believed that for American companies to withdraw from the market would perfectly suit the Chinese government. Then Baidu, and other local search companies that have zero compunction about censoring speech in far more ways than Google has contemplated, would command the field, and make more money to boot. (Read more in Kirkpatrick's latest Fast Forward column.)

January 26, 2006

Nelson Schwartz reports: Sometimes what isn't talked about is more significant than what is. Case in point: Iraq.

Although there is one session devoted to the subject featuring former Prime Minister Ayad Allawi and U.S. Sen. John McCain, the American adventure in Iraq isn't front and center here like it was as war loomed in 2003 or last year, when U.S.-European relations were still very strained. Another topic getting short shrift is the rising danger of a U.S. or Israeli confrontation with Iran.

Why is "The Emergence of China and India" one of this year's eight sub-themes but not the future of the Middle East? Maybe it's because the fundamental outlook of the Davos enterprise is optimistic and the Middle East today doesn't leave much room for optimism. Just look at today's victory by Hamas in the Palestinian elections.

Or perhaps it's because World Economic Forum chairman and Davos impresario Prof. Klaus Schwab has been burned before by wading too deeply into the Middle Eastern mire. A few years ago, he scheduled back-to-back speeches by Yasser Arafat and Israeli's Shimon Peres. A longtime peace advocate, Peres spoke first and gave his usual spiel full of hope for the future. Arafat followed with a blistering attack on Israel, leaving Schwab and everyone else red-faced.

But that doesn't mean the World Economic Forum or Schwab can get away from the Middle East, even if they try. Today, Schwab sent a letter to all of the forum's participants denouncing a story in WEF's own magazine, Global Agenda, which called for a boycott of Israel. He said it violated the WEF's essential commitment to open dialogue. And last year, a session featuring Iranian representatives teetered on the brink of collapse when alcohol was served.

I guess that's one advantage of anodyne sub-themes like "Building Trust in Public and Private Institutions" or "New Mindsets and Changing Attitudes." Participants may not be able to stay awake, but they won't walk out in protest, either.

Feedback: nschwartz@fortunemail.com

Wednesday's dispatches from Davos: An interview with Sergey Brin, how the powerful make their way to Davos; and more. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.