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Practicing what he preaches: Bill Gates joins U2 front man Bono and PC maven Michael Dell in Davos to pitch Vista-based PCs from Dell's namesake company. For every one of the computers purchased, Dell and Microsoft will make a contribution to The Global Fund to help in the fight against AIDS in Africa.

(Credit: Microsoft)

At the World Economic Forum in Davos, Switzerland, on Thursday, Microsoft co-founder Bill Gates told the corporate and governmental bigwigs in attendance that businesses should adopt a form of "creative capitalism" in which they seek to alleviate the problems in developing nations.

The notion is essentially this: coming up with drugs or water purification techniques for those nations may not be as profitable as catering to well-heeled retirees in Florida, but rewards will come nonetheless, in the form of recognition and, ultimately, a profit.

"Sometimes market forces fail to make an impact in developing countries not because there's no demand, or even because money is lacking, but because we don't spend enough time studying the needs and requirements of that market," Gates said.

Bah, says CNET News.com's chief political correspondent, Declan McCullagh. Encouraging companies to give to charities, enter smaller markets, or assign top employees to tackle intractable problems in far-flung regions--where those companies may not even have business--conflicts with the duties owed to shareholders. Besides, the shareholders can donate to charities on their own that they might prefer.

See "Gates misses the point on 'creative capitalism'."

Editor at Large Michael Kanellos, meanwhile, says corporations have broader powers. If participating in projects in Africa can help recruit or retain employees, or even open up new markets, it's a good idea.

See "On 'creative capitalism,' Gates gets it."

What do you think?

As investors around the globe view the sputtering U.S. economy with fear and trembling, at least one maven of the market economy sees a reason for hope: Bill Gates.

At the Government Leaders Forum in Berlin, a student has a close encounter with Bill Gates and a tablet PC.

(Credit: Microsoft)

Stopping in Berlin on his way to the World Economic Forum in Davos, Switzerland, where he's expected to speak Thursday about the ways a more "creative capitalism" could benefit society's needier members, Microsoft's chairman told the German newspaper Bild that the best medicine to stave off a worldwide economic crisis is a good dose of new tech.

"I am an optimist. The U.S. economy could remain strong in the next few years because technological progress will urge it forward," Gates said. (Bild, of course, put his words into German.) He put current fears into the context of recent history--a U.S. economy that he said has been strong for the last 10 to 15 years. That statement glosses over the bursting of a certain dot-com bubble a few years back, mind you; no telling if that's Gates' omission, or an editorial one.

Of course, he's always been notoriously upbeat about the coming economic and societal benefits of technology. An op-ed piece by Gates in Thursday's Wall Street Journal reads like the stump speech he's given countless times over the last decade or more: "Together, hardware and software will be the catalyst for advances during the next 10 years that will far exceed the changes of the last 30 years."

But that's his role: As he told Bild, "I'm no stock expert--I'm a software person." Asked if he knows how much money he personally might have lost as markets have tumbled over the last few days, he again took the long view. "I look at Microsoft's stock performance every couple of weeks. The important thing is that in the past it's gone up more than it's gone down."

Gates was in Berlin for the Government Leaders Forum, at which he recommitted Microsoft to its Partners in Learning program, which provides software and training to educational efforts around the world.

A Verizon Communications executive said Thursday that his company hasn't been hit by a U.S. economic slowdown.

Dennis Strigl, chief operating officer for Verizon, addressed concerns about an economic slowdown impacting the No. 2 phone company's business during a Citigroup investor conference. Earlier this week, AT&T's CEO Randall Stephenson spooked Wall Street by blaming a weak economy for a rise in residential broadband and landline customers who couldn't pay their bills during the fourth quarter of 2007.

Strigl said Verizon hasn't been affected in the same way. Specifically he said the company's small business and enterprise business units were performing as expected. He noted that there had been a slight uptick in some wireless customers not paying bills, but he did not attribute this to a weak economy.

Instead, Strigl emphasized competition from cable rivals as a concern rather than the economy.

Shares of Verizon were up $1.18 or 2.78 percent to $43.63 on the New York Stock Exchange Thursday afternoon. AT&T's stock was up only slightly 28 cents or 0.74 percent to $39.28.

Remember the good ol' days of enterprise software when a vendor could foist a multimillion-dollar software package on an IT buyer and get away with also charging downstream fees for support and maintenance?

In a sign that this bleak time for IT buyers is at an end (and a bleak period is ahead for proprietary software vendors), Goldman Sachs this week cut its 2008 estimates on a wide range of software companies, citing a softening in capital expenditures for the near term. According to a Barron's blog:

Goldman cut 2008 estimates on many software stocks, focusing on enterprise exposure, pure-plays that could be harmed as customers seeks to purchase good enough substitutes from larger vendors, and vendors who sell big ticket items that could be delayed in a slower spending environment. The firm cut estimates by 1 percent on average...

ASPEN, Colo.--It may seem that there's another Internet bubble afoot, given companies like Shelfari.com--"show off your books!"--receiving venture capital funding.

But an eminent Harvard economist says it's not true. "The IT boom is not coming back," Dale Jorgenson, a Harvard university professor, said on Monday. "On the other hand we're not in the midst of another dot-com crash."

Jorgenson, who gave a morning presentation at this year's Aspen Summit organized by the Progress and Freedom Foundation, displayed a series of graphs showing that while hardware prices have fallen (measured either by computer prices or component prices) in the last few decades, software prices have remained constant when adjusted for inflation.

But back to the crash. Jorgenson said that in the late 1990s, the IT industry has contributed an outside share of productivity gains. Now, he said, it's more evenly distributed: "The character of innovation in the U.S. economy has shifted drastically. It's shifted from IT production, which predominated in the boom, to the successful utilization of IT."

In 1899 economist/sociologist Thorstein Veblen introduced the term Conspicuous Consumption to describe what he believed to be the evils of wealth accumulation in the nouveau riche upper class of the Gilded Age (Veblen was not exactly a "right wing" economist). You can best think of Conspicuous Consumption today as the notion that consumerism and "keeping up with the Joneses" drives economics.

One of my friends, Helen Priest from Meridian Energy, coined a new version of the term this week--conspicuous sustainability. She is here from New Zealand's largest (and all green) power company visiting Silicon Valley, and she's watching the torrent of activity around everything green and clean. It struck her that we are reinventing Conspicuous Consumption--keeping up with the Joneses in all things green. You have to wonder if solar panels or a LEEDs rating on a McMansion somehow doesn't miss the point.

So let's think: Al Gore's son gets arrested for doing 100 mph with marijuana in the car--in a Prius! (As I told one my friends, I didn't know they could go that fast.) Nouveau riche tech execs out here in Silicon Valley put ultraclean, and even more, ultraexpensive, solar power on their roofs. Buckingham Palace offsets the carbon footprint of the Queen's recent trip to the United States. Dell has Plant a Tree for Me Program, which I used when I bought a new Dell last month. There is an exponentially increasing number of examples of consumerism driving green.

But to be fair--conspicuous sustainability is pushing everything from the rapid growth in solar to the greening of corporate strategies like General Electric's Ecomagination, BP's Beyond Petroleum and General Motor's Live Green, Go Yellow. It's pushing hybrid electric sales, fuel cells to power our PDAs and carbon offsets--all good things for the environment.

I put the term to my friend, green business guru Joel Makower, and he quickly agreed that conspicuous sustainability is exactly the term for our age (We didn't discuss whether it was good or bad). Joel's response was, "I think the quintessential symbol for the conspicuous sustainability age would be the carbon-neutral Hummer." Or maybe Gore's carbon-neutral 10,000 (square foot) San Francisco home. He also said "And then there's Moskito, Richard Branson's privately owned Caribbean island, which he wants to be carbon neutral..."

In Veblen's mind, Conspicuous Consumption was a very bad thing, but for green tech and the environmental movement, is conspicuous sustainability a good one?

For months, the community of virtual world publishers, players and economists has been holding its breath, waiting for the U.S. Congress to issue its report on the potential taxation of virtual goods.

Well, we don't have to wait much longer.

Dan Miller, a senior economist with the Congress' Joint Economic Committee, told CNET News.com on Friday that he expects the committee to issue its report during the upcoming Congressional recess next month.

What that report will say is unknown, as the committee has kept entirely quiet about its thoughts.

However, it's clear that something will happen.

"Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues," Miller, who is a fan of virtual worlds and economies, told CNET News.com in December. "So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way."

Meanwhile, a lot is riding on the outcome. If Congress signals it intends to start taxing in-world commerce, that could create huge problems for publishers who may have to figure out efficient ways to track all such trades. If Congress goes the other way, many people will feel that it is just punting and that it will still only be a matter of time before some major government decides to step in.

MONTREAL -- The theme of this year's Computers Freedom and Privacy conference here is autonomy, and an unexpected subtext were left-of-center activists fretting about whether data-mining will let online businesses charge customers different prices.

Usually this is expressed as: Will Amazon.com charge me more for certain products based on what it knows as my purchasing history?

In September 2000, reports said that Amazon.com was offering the same DVDs to different customers at discounts of 30, 35 or 40 percent. Amazon said it was a random price test, but after criticism, it decided to refund the difference to anyone paying the higher price and pledged not to do it again.

This week at CFP in Montreal, Jeff Chester and Chris Hoofnagle both warned about the privacy implications of price discrimination becoming widespread. (Chester runs the Center for Digital Democracy, which joined in a complaint against Google and DoubleClick last month, and Hoofnagle is a former activist at the Electronic Privacy Information Center who now works at a law clinic at the University of California, Berkeley.)

"Why can't we have something in the laws of identity that says you can't ask for identity for some stupid purpose, such as 'Serving You Better,'" Hoofnagle asked after a panel on Friday, referring to a set of best practices rather than government regulation. Chester told me that he believes that price discrimination will become a real threat.

But is price discrimination really so worrisome? In general, it's legal unless it's based on certain legal categories as race, religion, national origin or gender. There's also a federal law called the Robinson-Patman Act that's relevant.

That said, price discrimination is commonplace. Economist David Friedman points out that it happens frequently, for instance charging less for children than for adults at movie theaters. A child takes up the same sized seat as an adult, but price discrimination happens either because minors are less able to afford the cost themselves, or that parents won't bring multiple children if the full price is charged.

Price discrimination happens in terms of Slashdot subscriptions for advance article viewing, youth fares for trains, paperback vs. hardcover books, advance purchase vs. last-minute airline fares, and even Book of the Month Club selections, which are cheaper than the same title purchased at a bookstore. Haggling at bazaars and car dealers is price discrimination. So is ladies' night at bars and charging different prices for men's haircuts vs. women's when similar work is involved. And it happens when retailers send coupons to their best customers but ignore occasional ones.

But it doesn't always work. For one thing, a business needs to be able to figure out who will pay the higher price; if it makes the individual price too high it will lose a sale. Second, customers that buy something at a low price can turn around (if the difference makes it worthwhile) and profit by selling it at the market price.

And there are excellent reasons to think it won't work that well online when Internet retailers try to use a customer's purchase history to generate individualized prices that are higher than prices charged to new customers.

That's because for two reasons: First, online shoppers are very price-sensitive, and second, they talk. A lot. It's easy enough to use two different Web browsers -- one logged into your account and one that's not -- to check prices on Amazon.com. And it's even easier to post your findings online to one of scores of Web sites that specialize in price tracking.

So is price discrimination a worry? Do we need new laws banning Amazon.com from doing it? Probably not. In fact, the most common type of price discrimination that happens online is retailers giving out coupons to existing customers, something that's wildly popular. But that won't stop privacy activists from trying to make an issue of it anyway.