The Silicon Valley of the East

When someone mentions Israel, what comes to mind? Is it violence, war, and terrorism? How about desert, camels, and sand? If these terms are spot on, you are not alone.

Unfortunately, the former group of terms dominates world media, and the latter comes from assumptions based on Israel’s geographic region. Believe it or not, one of Israel’s many unknown qualities is as a hub for startups, particularly those centered in technology. In the era of Web 2.0, these startups naturally include businesses focused on developing and improving social media.

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 An impressive number of these ventures have managed to succeed, gaining a reputation as experts of innovation and drawing the attention of the world’s leading corporations. In the past few years, technological giants have acquired countless R&D projects and entire companies originating in Israel.

As you may have heard from my Tweets or from other news sites, the most recent of these acquisitions came from Facebook, Inc. who purchased the Israeli company Onavo just last week. The company specializes as a mobile data-saving app creator, likely acquired by Facebook in attempts to reduce data usage by its applications to expand its ability to offer its services in lower-income and less-developed countries.

This recent acquisition is of particular interest because Facebook has announced that it will not uproot Onavo’s staff to Palo Alto, where most of their operations have been consolidated. Instead, Onavo will become Facebook’s first R&D center in Israel, and is believed to be the first of a string of upcoming acquisitions by Facebook in Israel. This $100 million acquisition by Facebook is the largest by that company in Israel to date. With this move, Facebook joins tech giants Apple, Google, and Microsoft (as well as others) as companies with a physical foothold in Israel.

Technology Excerpt from “Israel Inside”

For those of you who are long-time iPhone users, I’d expect many of you are familiar with the mobile application “Waze.” If you don’t know it, this is an extremely popular, free application that offers a social networking version of a navigation application, using crowdsourcing as a key tool for analyzing traffic and more. I, myself, began using the app before the iPhone had a built-in navigation app, saving me from the loss of Google Navigation when I ditched my Droid. It took over a year, until I became involved in Israel activism, to realize that the app was in fact Israeli.

During the spring, both Apple and Facebook were looking to purchase Waze to build their social networking and mapping capabilities in order to compete with Google. Facebook struck up a deal with the Israeli startup, but negotiations failed when Facebook refused to allow the company to maintain its headquarters in Israel. This decision soon proved to be a crucial mistake for Facebook, when Google struck up a deal to purchase Waze for about $1 billion in June this past summer. Google has since kept their navigation applications separate, but used the capabilities from each to improve the other.

It seems as though Facebook learned its lesson and decided to get with the times, purchasing Onavo and allowing its employees to remain in Israel. Only time will tell how the acquired technologies will be implemented by Facebook, and what other acquisitions the Social Media Champ will make in Israel, ‘The Silicon Valley of the East.’

Sources:

http://www.haaretz.com/business/.premium-1.552430

http://news.cnet.com/8301-1023_3-57595620-93/google-reveals-it-spent-$966-million-in-waze-acquisition/

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