Israel Innovation 2.0

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.)

Tim Berners-Lee, the father of the World Wide Web, recently mentioned in his blog that social networking on the Web is providing people with the opportunity to share data about themselves and things related to them for the interest of others (i.e., for connecting to others). He explains though that the popularity of these social networks hide the reality of people using these closed sites not for the sites themselves but for the opportunities and connections that they provide them.

For those who aren’t familiar with Israeli society, it tends to pride itself on giving advice and having connections (protexia). The connection of people and information are strong values that are practically innate in Israelis and has probably contributed to Israel’s high-tech sector being very active in the Web 2.0 phenomena — so active, that I have been thinking ever since Daniel Cohen’s Israei Nokia article that if all these Israeli companies were pooled, Israel could have countered Google or created its own Facebook.

Unfortunately, it’s a lot easier said than done or even fully imagined. However, with Berners-Lee talking about the Giant Global Graph and the need to transcend the limits of the current social networking graph, maybe there is still the chance that Israel will build the next big networking phenomena. Israeli companies just have to think outside the box of the Web and the set up of social networks as we know it.

For anyone who wants to get started on this, here’s a list of some of the top Israeli Web 2.0 companies that offer interactive services that if were combined in a new way, I think could create the next big thing:

Fun:
Aniboom- Users can create animated clips, post clips, view clips here, and based on the popularity of content that you post, you have the chance to make some money as well.

Metacafe- A user-driven video-sharing site that shows only entertaining short clips that is first reviewed by users before it gets posted on the site. Program creators of the most popular content get paid.

BlogTV- For anyone who has something to share via video. This gives you the chance to create your own live channel on anything you want.

Search and Information:
Walla!- An Internet portal with free email for anyone, this is the first stop for local information and direction on the Web.

Answers.com- Formerly with the tag line, the encyclodictionalmanacapedia, Answers.com is a one stop information engine. It’s popular wikiAnswers allows users to post and answer questions on anything they might be wondering.

Collaboration and work environment:
eSnips- While it is great for its music features, eSnips’ 5GB storage gives users a way to easily store and share documents on the Web.

ooVoo- 6-way video conferences, video messaging and video chatrooms make this ideal for live video communication for business or for fun.

Verix- Offers solutions for Business Intelligence when it comes to sales.

Advertising:
Kontera- “Kontera is a leading provider of In-Text Advertising and Information Services based on patent- pending text and content analysis technology that maximizes relevancy and yield for online users, publishers, and advertisers.”

TVinci - “The TVinci media management platform helps video content owners, broadcasting channels and publishers enrich, socialize and personalize video content, while maximizing monetization.”

Hiro Media- Hiro’s ad-supported video downloading technology allows any video distributor to allow the unlimited sharing of its product over the Internet with the ability to monetize it. monetized.