Mad Dog 21/21: To Avatar and Avatar Not

Published: July 19, 2007

by Hesh Wiener

In the Hindu tradition, an avatar is the physical manifestation of a god; the principal avatars are incarnations of Vishnu, but there are others, too. Similar concepts exist in other religions, even ones that are not dharmic. In computing, an avatar is an animated sprite or icon that represents a real or invented player in a virtual amusement such as Second Life. In finance, an avatar is what IBM set up in Holland to obtain favorable tax treatment for a $12.5 billion stock repurchase, provoking the IRS to ban future incarnations of that particular caper.

So, it seems, avatar is a big, strong concept that can be found, as diluted as a homeopathic cure, in aspects of life far afield from Hindu theology and even in places that would make anyone who has respect for Hinduism cringe at the very use of the word. But that's what happens with big ideas and particularly ones that stem from our attempts to understand human nature and its place in a bewildering universe. Anyone seen as a great teacher may be called a guru, particularly by people who actually don't know a lot about the eleven Gurus of the Sikhs, or the gurus of other dharmic faiths. And cops call their mentors rabbis.

One of Bollywood's beauties, Shilpa Shetty didn't reveal whether Richard Gere made her barfi

Moreover, because we spend altogether too much time and energy tied to our media, we even can spot people who have tried, with varying degrees of success, to build public personas that are avatars of a sort. The stunning actress Shilpa Shetty has done a very good job of this, and has prevailed in at least two major trials of circumstance. In one case she joined a video sideshow called Big Brother, a series featuring the antics of real geeks, not computer geeks. Big Brother has attracted a vast audience that has led us to a most depressing insight: If one were to go out on a high ledge above a crowded street, a pretty substantial portion of the crowd gathering below would be hoping to see one jump. Ms Shetty, whose ability to stay in character while under duress makes her a living avatar in my book (or perhaps veda), remained a ray of sunshine throughout, and you know how rare a ray of sunshine is in England, where the show was staged.

Subsequently, in her native India, she suffered a public snogging attack from actor Richard Gere and once again preserved her dignity. If she had run back to her dressing room and threw up, nobody would think less of her. And had she vomited on Gere right then and there, I would have wished to be present so I could applaud. Gere was accused of a crime, basically for public immorality, but eventually escaped justice. It's a safe bet that in the fullness of time he will get whacked by higher forces of justice--karmic ones.

Paris Hilton, who is at least as well known as Shilpa Shetty, although we are not quite sure why, has recently let her public persona shatter like a mirror in a nightclub bathroom accident. She just doesn't have what it takes to be her own avatar. She started wailing and yelling for her mommy at the mere prospect of incarceration, and, to make matters worse, all that salt water didn't help at all. Although Ms Hilton has in the past appeared to thrive on public indignities, her future doesn't figure to be the same. If she had only sprung for a taxi, she'd still have a chance to live through the living avatar she had built for herself.

Paris Hilton: A queen of the celebrities, but one from the House of Martha Stewart

Hilton should have paid more attention to the way Shilpa Shetty behaves, or to Irving Wladawsky-Berger, the prominent IBM scientist. Dr Wladawsky-Berger knows an awful lot about avatars, the kind one creates to better cope with human affairs and the kind one creates for virtual worlds, too. The Wladawsky-Berger you can see sprung from the Wladawsky-Berger who grew up in Cuba, and from family with roots in Eastern Europe. And that's only the living avatar stuff. Wladawsky-Berger also has a digital avatar that lives in Second Life, and that incarnation has inspired quite a bit of thought inside IBM.

Wladawsky-Berger believes virtual worlds like Second Life provide important outlets for creative expression and scientific innovation. He is an exception in the post-Gerstner universe of Big Blue, a researcher who is allowed to waste a colossal amount of time on the off chance something useful might come of it. There were lots of people like that at IBM in the pre-Gerstner epoch, but there are precious few today. It's even possible that Wladawsky-Berger is the only person at IBM who can get away with this sort of stuff. If so, it explains why IBM doesn't seem to invent much anymore, at least not in terms of things that involve a leap into new territory. The stuff coming out of IBM's labs these days may be invention in legal terms, and it surely helps improve the state of technology, but it's generally not the kind of stuff that changes art of science.

In contrast to this general picture, which looks washed out compared to the way things once were at the TJ Watson Research Center and elsewhere in IBM, it's hard to talk about IBM's contribution to technology, even in somewhat critical terms, without noting that IBM has somehow managed to sustain its old standards in one truly important aspect of computing, and that is virtualization. IBM invents and inspires others to invent the body of impressive hardware and software that enables computers to support avatars of computers. One secret ingredient of the thinking behind all the advances in virtualization is the stuff Wladawsky-Berger is doing as he goofs off in Second Life. Wladawsky-Berger has somehow inspired a lot of people to think about the various processes that can turn a Turing machine into a touring machine. A number of these people are within IBM, giving Big Blue inspiration. Somebody is going to find the best ways to turn whole computing processes into complex objects, and as long as it has people like Wladawsky-Berger floating around, IBM has at least as good a chance as any company to be the place where the milestone work gets done.

In the meantime, Wladawsky-Berger may have stimulated some creative thinking by IBM's lawyers and accountants. At the very least, Wladawsky-Berger's interests seem to have a great deal in common with those behind a great deal.

At the end of May, IBM said it was going to buy back $12.5 billion of its shares using $1 billion in cash. It said it would borrow the rest of the dough. The deal wasn't done out of IBM headquarters in Armonk, but instead through an avatar company IBM set up in the Netherlands. Basically the Dutch Avatar Caper allows IBM to get the results of bringing a ton of money from overseas into the USA without taking the tax hit that would follow if it did its deal out of Armonk. Reportedly, the caper will save IBM from $1 billion to $1.5 billion in taxes.

Irving Wladawsky-Berger: IBM's most prominent scientist has an inspirational Second Life avatar

IBM didn't invent think kind of deal. It's been around long enough to even have a nickname in financial circles. IBM's move is called a Killer B deal, and the term comes from the portion of the U.S. tax code, section 367 B, that would be invoked to avoid tax on the transaction because it was handled by an offshore avatar.

Shortly after stories of IBM's Dutch Avatar Caper were reported in the financial press, the IRS said it would issue new regulations governing similar transactions. This avatar will not appear again in the same incarnation. Depending on how the new rules are written and what the lawyers and accountant who specialize in tax sheltering say about it, not only will there not be another deal like this but there might not be any variations, either. It's safe to say a lot of high-powered tax experts will try to find ways to persist, because there's so much money involved, but the IRS seems pretty determined to hold the line.

However it plays out for other multinationals looking for ways to escape the tax authorities, IBM is in the clear. Nothing the IRS said in the wake of the Dutch deal suggested that anything IBM did broke the rules of the day.

And, so far at least, Wladawsky-Berger hasn't been busted for money laundering in Second Life. However, he hasn't gotten a date with Shilpa Shetty or her avatar personality, either. And if his digital avatar keeps dressing in a dingy New York Mets shirt, he's not going to.

Wake up, Irving! Get your avatar a nice cricket jumper.

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