Israeli startups during the economic crisis: Answers.com
In the first post of this series, I wrote about The Israel Conference which took place in LA last week and how its purpose was “to showcase Israeli excellence in technology and products and to expand business and investment opportunities between Israel and California.”
The conference had more than $20 billion in capital represented and brought together over 50 Israel-facing companies for a day full of presentations and advice from some of Israel’s most well-known investors (Jeff Pulver and Yossi Vardi) and most successful startups (i.e., Check Point, Tigo Energy, Answers.com, etc.).
Bob Rosenschein
Answers.com is one of the most interesting websites coming out of Israel. It was founded by current CEO, Bob Rosenchein in 1999 as GuruNet and struggled as a desktop software company before its reincarnation as the Web-based answers service, Answers.com in January 2005.
The site which used to dub itself an “encyclodictionalmanacapedia” started out licensing content from encyclopedias and dictionary companies, such as Barron’s, Miriam-Webster and Wikipedia among over 250 others. In November 2006, the company acquired the user-generated Q&A site, FAQ Farm and renamed it WikiAnswers.com.
WikiAnswers has since fueled Answers.com’s current growth, which, in a recent interview I had with Bob Rosenschein, he attributes to a successful cycle of “Traffic. Questions. Answers”- traffic leads to questions being asked which leads to questions being answered on a continuous basis.
WikiAnswers
The increased traffic has led Answers.com to become one of the top 20 fastest growing websites in 2009 and the site to become profitable.
“The biggest news of 2008 for us was that in the second half of 2008 Answers.com turned profitable,” Rosenschein explains.
Answers.com’s profitability isn’t just from an increase in traffic though. As it has shown from its GuruNet days, it isn’t afraid to make changes and tweaks to anything. To increase profitability, the company changed its revenue model in 2008 moving from direct ads to display ads and performance ads, “the performance ads being the most profitable.”
Among the constant tweaks the company is making, we can expect to see in the next year “improvements in search, more functionality and internationalism.” The site will be made available in the languages of non-English countries that currently provide significant traffic to the site.
Rosenschein’s advice to startups is, “Be flexible. Roll with the punches, hold onto cash and be able to adapt. The most important thing is perseverance- don’t give up too quickly.”
Update June 15, 2009 Globes reported today that Answers.com has raised an additional $7 million from Redpoint Ventures.
(Disclaimer: As part of a work experience program in the summer of 2006, I interned at Answers.com in Jerusalem for six weeks.)
Confidela and 15 Israel-related headlines from the week of May 31, 2009
Filed under: Cleantech, Company Briefs, IT management, Industry pulse, Information Technology, SaaS, Uncategorized, VC, Web2.0
During the week of May 31, 2009, Sunday Energy, SolarEdge and Ormat all had major announcements related to providing alternative energy in Israel, while GameGround and The Box successfully raised funds. In IT, Discretix explained the threat of bank accounts being hacked on mobile phones and Trusteer signed a contract with PSECU in England. For these stories and the rest of this week’s 15 Israel-related headlines, check below.
Cleantech
1. Sunday Energy forges new ground in Israel with Ormat
2. Israeli firm boosts performance of photovoltaic solar array
3. Exploiting Limited Resources
Investments
4. GameGround snags $4.1 million from Sequoia for gamer services
5. Investment in Green Energy Quadruples in 4 Years
6. Israel’s The Box Secures Funding from Greylock Partners to Target US and Other International Markets
Information Technology
7. PC Touch-Screen Technology Moving Beyond Curiosity
8. How much serious is the threat of hacking bank accounts via mobile phones? (Discretix)
9. PSECU Secures Web Channel with Trusteer
10. Virtualize Your Internet Connection with BufferZone
11. WatchDox Makes Document Security Simple
Miscellaneous
12. Central Park’s Tel Aviv ‘beach party’
13. Video: Microsoft’s Project Natal in action
14. Nestle producing new breakfast cereal in Sderot
15. Brain research center to be built at Hebrew University
Funding Israeli startups during the economic crisis: The Israel Conference
Filed under: Cleantech, Industry pulse, Information Technology, Partnerships, Uncategorized, VC, cloud computing
Despite the economic downturn, Israel’s startup scene is as strong and vibrant as ever. Just as the innovation hasn’t stopped, neither has the need for outside funding to develop these exciting technologies. Several conferences and forums have been organized in the past few weeks to maximize the access of Israeli startups to the funding they need. One that hasn’t happened yet, but will on June 4th in LA, is the The Israel Conference.
Considered the first of its kind, The Israel Conference will have more than $20 billion in capital represented when it brings together over 50 Israel-facing companies to showcase Israeli excellence in technology and products and to expand business and investment opportunities between Israel and California.
Presenters and panelists include Yossi Vardi (”the Father of Israeli Hi-Tech”), Erel Margalit (founder of Jerusalem Venture Partners, a venture capital fund) and Jeff Pulver (social media guru and VoIP pioneer) . The presentations will cover a wide range of topics from a look at VCs and the CEOs they back (why they were funded and the results today) to green tehcnology (how innovation in that field is helping the earth and changing our lives) and sales opportunities in a slow economy (where the money is, what the current market is like and how Israeli companies are maintaining a competitive edge).
Some of Israel’s overall edge and Caifrornia’s role in it can be attributed to the following:
- Israel has over 8,000 patents from a population of just 7 million.
- Within the past 15 years, major companies have risen that were developed in Israel and have their corporate office in California with job creation in the hundreds of thousands, world-wide. A number of these are Fortune 500 today with corporate offices in California such as Check Point, Zoran, and Amdocs.
- Israel has the largest number of scientists in the world per capita at 145/10,000 compared to the US with 85/10,000.
- In 2008, over $2B in capital was invested over 480 Israeli high-tech companies, an increase of 18% over prior year with 50% coming from funds outside of Israel, mostly from the US.
- Over the past 3 years, Israeli firms raised $2.3Billion in IPOs on exchanges around the world while over $18B was spent on acquisitions of Israeli High Tech companies.
The conference will also feature a presentation by Bob Rosenschein, the CEO and Founder of Answers.com, one of the Top 20 fastest growing Websites. I recently had the chance to interview Rosenschein and will post about that next in this series.
12 Israel-related headlines from the week of April 26, 2009
Filed under: Cleantech, Company Briefs, Environment, Industry pulse, Information Technology, Uncategorized, VC, Web2.0, virtualization
During the week of April 26, 2009, Israel celebrated its 61st annniversary while its first solar farm powering a small community was inaugurated. ETV Motors raised $12 million in funds and N-Trig announced its latest advancement in multi touch. Sadly, also during the week of April 26th, Israel’s hi-tech industry lost one of its beloved leaders and pioneers, Nahum Sharfman in tragic plane crash in Greece. Sharfman was the founder of the security company CommTouch and the price comparison site, Shopping.com. For these stories and more, check out this week’s 12 Israel-related headlines below.
Cleantech
1. Israel Inaugurates Unique Solar Farm
2. Solar Thermal: Which Technology Is Best?
Investments
4. Venture capital investment in Israeli high-tech companies lowest in three years, report
Information Technology
6. Intel bolsters cooperation with Israeli companies
7. N-Trig launching software to enable more versatile multi-touch displays
8. Start-up Axxana ties disaster recovery gear to EMC software
9. Will XP Mode Be Tough Sell For Small Businesses?
Miscellaneous
10. Israel celebrates 61st Independence Day
11. Can Israeli technology stop swine flu?
12. Plane crash kills high-tech leader
10 Israeli infosec companies at the 2009 RSA Conference
Filed under: Data Storage, IT management, Industry pulse, Information Technology, Internet Security, Uncategorized, cloud computing, data security, virtualization
The 2009 RSA Conference kicked off yesterday in San Francisco. As the conference is the biggest annual information security one in the world and Israel is a leader in the field, several Israeli companies are present this year as sponsors, exhibitors, speakers and attendees. Some of the companies exhibiting and attending include:
- Check Point Software Technologies
- Tufin Technologies
- Safend, Inc
- Imperva
- Radware Inc
- Aladdin Knowledge Systems
- AlgoSec
- Cyber-Ark Software, Inc
- Promisec
- Commtouch
Hot topics expected to be discussed in depth throughout the conference are cloud computing security, conficker worm and the conflict between national security concerns online and the protection of citizen’s rights.
Though reports indicate that overall attendance at the conference this year is significantly lower than in previous years due to the state of the economy and companies cutting back, it is unclear how this has impacted participation and attendance among Israeli companies compared to past years.
14 Israel-related headlines from the week of March 29, 2009
Filed under: Cleantech, Company Briefs, IT management, Industry pulse, Information Technology, Israeli Websites, SaaS, Uncategorized, VC, Web2.0, cloud computing
The week of March 29, 2009 was one of the busiest weeks of the year for Israel’s Web industry, with conferences and events happening everyday. Three bigg events were TheMarker’s COM.Vention on Sunday and Jeff Pulver’s Tel Aviv breakfast and Techonomy on Tuesday. While these events showcased Israel’s most promising Web startups, there was buzz about Israeli companies starting to bypass the US market and target the market in China. For more on these stories and the rest of this week’s 13 Israel-related headlines, see below.
Cleantech
Israel’s Aora Solar To Begin Clean Energy Production
Leviathan looks to wind energy device sales
Global VC Funding of Clean Tech Plunges
Investments and M&A
Building A Bridge Between Israel & China
Israeli Entrepreneurs: Know What Game You Are Playing
The tycoons’ companies don’t create jobs
Information Technology
AICC member Unisfair Launches Channel Program to Capitalize on Growth of Virtual Events
Savvy entrepreneurs tapping risk (CTERA)
XMPie and NowDocs Introduce XMPie-enabled NowPrint 7.0
SaaS’ Testuff Nabs 2,000th Customer
Miscellaneous
Techonomy 2009: Great Startups And Amazing Event
MyHeritage: Avoiding the MetaCafe Curse
Impressions of TheMarker’s COM.vention from a new immigrant (Israel Innovation 2.0 coverage from guest blogger Jessica Korman)
Impressions of TheMarker’s COM.vention from a new immigrant
The following is a recap by Jessica Korman of TheMarker’s COM.vention which took place earlier today. Jessica Korman is a graphic designer, blogger and new immigrant.
“The future is already here, it’s just not evenly distributed yet” – William Gibson
I just got back from The Marker COM.vention held at Airport City. It was a great opportunity to see “Twitter” friends whom I may or may not have met before. While social media is not a dying trend, it is still important to connect to people on a personal level. That was my main purpose in attending the convention; as a new immigrant in Israel I find myself in the midst of a networking frenzy. In that respect, social media is a tool, a means to an end and not the end itself.
The convention itself had 2 tracks, ‘The New New Thing – NGN’ sponsored by Bezeq, and ‘Beyond the web 2.0.’ I attended two panels within the ‘Beyond the web 2.0′ track. The first panel I attended, “Beyond Web 2.0,” was moderated by Israel’s Hi-Tech guru, Yossi Vardi and included Anil Hansjee, Head of Corporate Development EMEA, Google (UK, London); Allen Hurff, SVP MySpace; Jane Thompson, Managing Director, International, IAC and Greg Cohn, Director of Strategy and Business Development Yahoo! as panelists.
Yossi Vardi, LeWeb 2008
They discussed how the Internet is moving from our PCs (or in my case, Mac) onto a smaller screen, such as the Android or iPhone and other trends, such as social networking, semantic web and cloud computing, and that search engines are evolving with those trends. The discussion also brought up that there will also be more engagement with entertainment, for example more interaction between the consumer and the advertiser. They concluded that social networking needs to evolve by indexing our relationships, and we must trust our networks to make our privacy decisions for us. From an entrepeneaurial perspective, the economic downturn is actually a great opportunity for start-ups.
The second panel I attended was “Microblogging, Substance or hype.” It was moderated by Gadi Lahav, Director of Internet Content at Haaretz Media and the panelists included Deborah Schultz, Consultant, Advisor and Strategist to Start-Ups and Large Organizations; Yosi Taguri, VP R&D and Social Thinker at Nuconomy and Joi Ito, CEO of Creative Commons. The panel was basically about Twitter, and, in fact, one of the panelists tweeted that this might be the only time it is socially acceptable to tweet when part of a panel.
Deborah Schultz, October 2008
They said that the idea of microblogging is socially connecting on the fly and that it broke the “real-time” barrier. While Facebook is a database of social connections, Twitter is a constant flow of content and ideas. Actual blogging is much slower but that is not to say that Twitter will be the death of blogging. It might mean less frequent updates or less people creating new blogs, but blogging will still remain part of the conversation.
At this point in time, it is imperative that corporations learn how to participate and use social networking with their branding and marketing. Companies need to learn to use the tools to listen to customers, and let the users know they are being listened to. What still needs to be determined is how to monetize microblogging sites such as Twitter and we have yet to see a business model. The question was raised by one of the panelists, that at this point, does Twitter even need a business model?
What was clearly a sign of the times was the scaling back of emenities commonly found at conventions such as these. Instead of coming home with an armful of gifts, I came home nearly empty handed. Most of the stands were giving away chocolate coins instead of shwag.
15 Israel-related headlines from the week March 22, 2009 (Sarah Lacy TechCrunch Edition)
Filed under: Cleantech, Company Briefs, Environment, IT management, Industry pulse, Information Technology, Mergers and Acquisitions, VC, Web2.0, virtualization
During the week of March 22, 2009, it was announced that Israel will share its farming technology with Kenya and more details of the government’s water technology initiative, NEWTech were given. The sale of Aladdin Knowledge to Vector Capital was completed with the news that Aladdin and SafeNet were under common management and information security company, Tufin, added new features to its firewall management platform. Facebook became even more stalkerish with a new photo facial recoginition and tagging application by Israel-based Face.com and SEO guru, Barry Schwartz shared what he found Israeli SEMs are looking for. These stories are only some of the main ones that made it into the media last week. For links to these and the rest of the stories from the week of March 22, 2009, check below.
Cleantech and Environment
1. Israel NEWTech, A Government Initiative To Promote And Grow Israeli Water Technology And Innovation
2. Israel to share farming technology with Kenya
Investment and M&A
3. Value of Israeli high-tech M&A fell 19 percent in 2008
4. Funded: GoViral, BriefCam, Extreme Reach (BriefCam)
5. SafeNet, Aladdin Knowledge Under Common Mgmt
Information Technology
6. HP to Provide Compaq My Bhasha with its Desktops
7. New Cyber-Ark controller clocks all super-user activity
8. SkillIQ is set to Revolutionize the Human Resources World
9. Dell Certifies Aternity as ISV Partner
10. Tufin adds white lists to firewall management platform
Miscellaneous
11. Israel’s Explay helps you see the big picture
12. First Look: Photo Finder facial recognition app for Facebook
14. Partnerships between Florida, Israel are key
Bonus: TechCrunch’s Sarah Lacy in Israel and reactions.
Sarah Lacy, August 2008
Last week Twitter and the Web erupted when the newest member of the TechCrunch team, Sarah Lacy, posted that Israeli entrepreneurs lost their mojo and that investing in Israel was overhyped. Here are are just some of the responses to Lacy’s post as well as her post and its follow up.
Now that China Is the New Israel…What’s Israel? (TC)
What’s behind Sarah Lacy trash talking the Israeli VC scene
Israel is the new Israel (Israel Innovation 2.0 response)
Sarah Lacy, David Li and the Wrong Side of Historical Performance
Risk Aversion And The Perils Of Selling Too Early (Israeli Startups, Part II) (TC)
Twitter responds
Israel is the new Israel (Alternatively, if TechCrunch is the go-to online tech publication, will TreeHugger be the new TechCrunch?)
Filed under: Cleantech, Industry pulse, Information Technology, VC
Sarah Lacy over at TechCrunch posted today that Israeli entrepreneurs post-bubble have lost their mojo and VC funding has reflected that. There has been a lot of reaction to her post in the comments section and off the site, but it is really much more complex and wide-ranging than a post on TechCrunch or even here on Israel Innovation 2.0 can handle. I think that Sarah is both right and, of course, wrong.
She is right that the crop of Israeli IT and Web startups are disappointing when compared to Check Point and ICQ from the 1990s. There have been many theories, denials and other responses of the lack of companies of this caliber in the past few years and I have to say, when researching these different companies, there definitely is a difference.
The theories for this that I believe and have often mentioned (sorry to anyone familiar with those posts) are the ones Daniel Cohen of Gemini Israel Funds wrote about in an article on Venture Beat back in the fall of 2007: “Entrepreneurs want to retire with $3-$4M, Impatience of investors, ‘Think small’ mentality and The lack of $1bn experience.” Add to these reasons the brain drain of top engineers and entrepreneurs and relocating the company outside of Israel and Lacy has a very good point.
Fortunately though, Lacy’s post on TechCrunch was only fulfilling a certain agenda and only relevant for the IT and Web 2.0 sectors which TechCrunch covers. No matter what happens with Israeli IT companies in the future (and I believe Israeli SaaS and security companies, such as Clarizen, Imperva and Trusteer all have a lot of potential), Israel is almost guaranteed to be the main player beyond this in the next tech revolution, clean technology.
A lot of VC funding has gone into cleantech companies in wastewater management, solar energy and wind energy that won’t mature and really show its worth for another few years. In addition, there is a noticeable trend over the past year of people from Israel’s IT sector considering and heading into cleantech.
So, where does China fit into cleantech? I haven’t researched it to say, but on the Israel end I know that China, along with several other Asian countries, countries in Africa and Australia have all expressed interest in Israel’s innovations especially to deal with water conservation management and solar energy. If in relation to Lacy’s article, China is getting more investments in IT (the greatest tech sector in the past) in comparison to Israel but not in relation to cleantech (the likely greatest tech sector in the future), the answer to Lacy’s question about “If China is the new Israel..” would really be that Israel is the new Israel.
Israeli companies to watch at SXSW Interactive
Filed under: Industry pulse, Israeli Websites, Uncategorized, Video
The annual South By Southwest Interactive (SXSWi) conference kicks off in Austin, Texas tomorrow and will run through Tuesday afternoon. I’ll be at the conference, which celebrates emerging technology, some of the days and will, of course, be paying close attention to any Israeli representation there, specifically by, ooVoo, which will be exhibiting there.
ooVoo is a video chat and communication service that offers everything from high-resolution video and video conversation recording to telephony and video and instant messaging. The company will be presenting its new API for video application developers at SXSWi.
In addition to ooVoo, I will be keeping a lookout for Ouriel Ohayon, the VC and former editor of TechCrunch France, who recently launched the Topify application for Twitter with Arik Fraimovich. Topify replaces the current text of the email that Twitter sends out notifying you when someone follows you with an email that includes in addition to the person’s name and Twitter link, their profile information and an option to follow them back directly from within the email.
Will you be at SXSWi? If so, let’s meet up! Send me an email at lisa@israelinnovation20.com or post it in the comments below.
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