Halliburton to Dubai

Editorial

International Herald Tribune

A handshake can still trump a videoconference. The energy services giant Halliburton announced on Sunday that it will move its corporate headquarters and its chief executive, David Lesar, from the old boomtown of Houston (Texas) to the rising boomtown of Dubai (United Arab Emirates). The move sends the message that even in the new economy, some of the old rules still apply — including that location matters.

Halliburton's name will forever be linked in many Americans' minds to its former chief executive, Vice President Dick Cheney, and a $16 billion contract to support American military operations in Iraq, which has led to investigations into overbilling and the mishandling of taxpayer dollars. While Capitol Hill critics may not like the company, they don't want to see its back either.

The company will remain incorporated in Delaware, other executive officers will stay put in Houston, and, the company insists, there will be no tax benefits from its move. Halliburton — which is spinning off its embattled military contracting subsidiary — says it wants to focus on energy. As the saying goes, it's going where the oil is.

That stands in conflict with the popular notion that the wired world has made geography irrelevant. But all the BlackBerry devices and Internet phone calls in the world can't make up for in-person interactions. That's not just for old-economy companies like Halliburton, either. Silicon Valley continues to act as a leading incubator for high-tech startups. Once you have a critical mass of software engineers and venture capitalists attending the same happy hours, a certain ferment takes place.

That's no argument for complacency by policy makers. It is easy to imagine, for instance, that Halliburton might not have deemed this particular move necessary without the visa problems that visiting business people have been having, particularly those with Muslim-sounding names.

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