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Business and financial news in Israel and the Middle East

Mazal Tov to LabPixies

Google has announced an agreement to acquire the Israeli start-up Labpixies for an estimated $25 million, in a move which it hopes will strengthen its search pages through the development of Web site gadgets to attract even more users.

“We are excited to welcome Labpixies, they are a natural fit with our Israel team and represent all that is attractive and innovative about the Israeli tech start-up scene,”

Said Yossi Matias, the Director of Google Israel R&D center.

The acquisition is actually the first-ever deal that Google has made in the Jewish Country since its center in Israel was launched in 2005. Google claims that the deal is a strategic step for its Israel research & development center. The Labpixies team, under the terms of the deal, will be integrated into the Google Israel office based in Tel Aviv working across a wide variety of platforms and anchoring the iGoogle search page across Europe, the Middle East, and Africa.

Google said:

“The shared focus on the user and passion for applications made this the right time to come together and an exciting opportunity to do more together for users and developers…The acquisition is an opportunity to learn from each other to bring more applications to users, help developers and improve the overall developer ecosystem.”

Founded in 2006, Labpixies creates interactive gadgets for web environments. These mini-applications are personalized web gadgets, known as “widgets” including iGoogle, Android and iPhone, and are developed in-house, from inception to creation.

LabPixies’ widgets range from handy tools such as calendars, news feeds and to-do lists to entertainment and games.

The start-up, which is run by a tiny team of 10 employees, has until now developed 70 widgets and has over 40 million users. The start-up is financed by private investors and received $1 million in a series round of funding in June 2008. Among the investors is Yaron Carni, who represents a boutique Angel group of high added value individuals from New York and London, who invest privately in a variety of strictly Israeli based companies.

CEO of Labpixies, Ran Ben-Yair said:

“We started Labpixies to create a truly personalized online experience and develop fun widgets that people find useful every day…Working at Google will help us scale to more people as well as giving our team greater opportunities.”

In recent years, the Labpixies and Google team have worked on many projects together, including the launch of global OpenSocial. In addition, Labpixies was one of the first developers to create gadgets for iGoogle, in order to give users greater access to useful everyday information such as news, weather, games and videos as well as email.

Something Is Rotten in the State of Israel

Holyland Project

To say that Israeli politicians have never been morally bankrupt is a lie – even some of the notable heroes of Israel politics like Golda Meir made mistakes, all be them honest ones – but this so-called Holyland case, concocted of the childish, conniving and greedy behavior of middle-aged Israeli political and corporate power-hitters is sickening – that is the activity, not the investigation.

Ehud Olmert is proof that the higher you climb in Israeli society, if you don’t watch your step, the lower, harder and faster you are bound to fall. In a time and place where everything you do is not only scrutinized by the non-understanding eyes of the global community, but attacked by hate-filled finger-pointers, is it too much to seek some role-model grade behavior among our leaders. Is this unrealistic?

Sure, bribery and other scandals is nothing new among the politicians of the Jewish Country – I don’t think that I need to name names or incidents, and we the Israeli people have become somewhat hardened by it – or the unscrupulous behavior of a few greed-driven politicians is certainly drowned out by the voices of our boys on the front lines or the risk of terrorism. Right? Well it appears that the Holyland case may be something of a record-breaker.

The main player in the case is an unnamed individual who allegedly received 55 million NIS from Holyland developers, acting as the intermediary, passing the bribery funds to the necessary persons towards advancing the project and eventually gaining the permits to build the monstrous structure which now stains the not unstained holiness of the Jerusalem skyline.

Another key suspect is an unnamed accountant, who police believe did made payoffs in the form of legitimate donations, seeking to pressure him into turning over the facts in the case, to incriminate others. Police also think that in some cases, opponents of the project were persuaded to become supporters after they received free apartments.

Former Jerusalem Mayor Uri Lupoliansky is accused of playing a vital role in the illegal activity, as head of the planning board. On Wednesday night speaking publicly with Channel 10 News, Lupoliansky shifted the responsibility to another former Jerusalem Mayor Ehud Olmert. Lupoliansky explained that the mayor is the one calling the shots, not his deputy.

Ehud Olmert’s former Bureau Chief Shula Zaken will probably be detained and interrogated after returning to Israel from the United States. Her home was searched about a week ago, in her absence, when investigators seized several documents which tied her to the Holyland scandal.

On Wednesday, police detained businessman Danny Dankner and former head of the Israel Lands Administration Yaakov Efrati. Both of them were arrested as part of the National Fraud Unit’s Holyland corruption affair investigation, which apparently has shed light on further illegal corruption situations.

Danker, the former Chairman of Bank Hapoalim was interrogated by the National Fraud Unit on suspicion of committing criminal offenses like bribery and breach of trust. Efrati currently serves as Chairman of the Directorate of Israel Railways.

Meanwhile, police have completed their investigation of allegations against Mayor Zvi Bar of Ramat Gan and believe that there is sufficient evidence to press charges.
The mayor is suspected of corruption, money laundering, bribery and income tax violations.

Levant Basin Province Has Gas

According to the humble estimate of a US energy industry expert, international companies might soon join exploration efforts for oil and gas in the Holy Land.
Fred Zeidman told Globes website:

“It is quite likely that international firms will join the exploration efforts on Israeli territory; this comes one year after the ‘Tamar’ and ‘Dalit’ discoveries in the Mediterranean Sea. One international firm has already embarked on the could-be gold rush: Noble Energy, which was the partner of Delek and Isramco in their respective discoveries”.

Two of Israel’s largest financial groups: Nochi Dankner‘s IDB group and Ofer Nimrodi’s Israel Land Development too have entered the sector already.

Zeidman said:

“It happens all the time…We see in the US that the moment a company discovers oil or gas that can be transported, there’s a crazy rush to the region by other companies, and that’s a function of the size of the reserves found. Around the world, as soon as Noble goes to a place, many other companies follow in its wake. The prospects here are amazing, and I have no doubt that we’ll see an economic boom, and a rush of more companies to Israel from overseas following Noble.”

Levant Basin Province

A report done by the U.S. Geological Survey estimates that 122 trillion cubic feet of recoverable natural gas are in the Levant Basin Province in the eastern region of the Mediterranean.

This area includes the coastal areas near Israel, Lebanon and Syria.

Brenda Pierce, a USGS Energy Resources Program Coordinator said:

“The Levant Basin Province is comparable to some of the other large provinces around the world…Its gas resources are bigger than anything we have assessed in the United States.”

The Levant Basin Province holds an estimated 1.7 billion barrels of undiscovered oil, which can be easily recovered with existing technology. This marks the first time the USGS has assessed the Levant Basin area for extractable resources.

Good Days Ahead

Israel 1948
Another milestone en route to turning into a highly developed economy, Israel’s per capita GDP will reach $30,000 this summer and the overall gross domestic product will reach $230 billion.
In the first half of the decade The Jewish Country fully reached the $20,000 per capita GDP mark. It happened slowly and reticently; the recession of the second Intifada curbed economic growth and pushed the economy backwards.

Reaching the $30,000 per capita GDP mark partially reflects the increase in real national income in shekels, and the shekel’s strengthening against the dollar.

The state of the Israeli economy at this juncture is exceptionally good. Other economies whose per capita GDP is similar to ours – Spain, Greece, Portugal, and Britain – sustained harsh blows during the financial crisis. Their focus in the coming years will be on licking their wounds and attempting to extract themselves from the abyss of debt and deficit. Their recovery promises to be slow.

In six of the seven leading industrial powers, the ratio between government debt and GDP will grow by dozens of percentage points in the next few years. The debt will reach 90% of the GDP in Germany, 96% in France, 100% in Britain, 110% in the US, 130% in Italy, and 250% in Japan. In Spain, Greece, Portugal, and Ireland, the ratio will stabilize somewhere between the 100% to 150% mark.

Yet in Israel, the opposite should happen: debt will go down to only 70% of GDP. Israel’s banking system managed to overcome the past two years without taking a penny from the government.
Prime Minister Benjamin Netanyahu presented an ambitious goal for Israel: Joining the list of top 10 or 12 richest economies in the world. Based on today’s perspective, this target appears to be realistic. In order to make it happen, Israel needs to reach the $40,000 per capita GDP mark. To that end, the economy must grow at an annual rate of 6.5% in the next six to seven years, assuming that the shekel exchange rate won’t change much from its current level of about NIS 3.6 per dollar, and that the population will grow by 1.8% annually.

In the years 2003-2008, the economy in the Jewish Country grew at an average annual rate of 5.5%, and with a less convenient starting point and two wars in the middle.

The accelerated growth to happen in the coming years can be premised on the following: Tens of thousands of ultra-Orthodox men joining the workforce, boosting the production of Israeli Arabs, improving the quality of education and employment, massive investments in educational and physical infrastructure, expanding the export base and directing it to new markets, slowing down the growth of the defense budget, and removing bureaucratic obstacles.

The kibbutzim reinvented themselves and have again turned into an economic asset and a stalwart growth accelerator; the discovery of natural gas by businessman Yitzhak Tshuva frees Israel of the dependency on coal and dramatically brings down the cost of electricity production; the Arab sector is witnessing an unprecedented entrepreneurial business revolution, and Israeli software companies are taking over Africa.

Israel’s economic rather than military wings are spread and flying independently.

Israeli Women Continue To Make Less Than Men

The average woman in Israel lives to age 83, gives birth to three children, and makes a third less than the average man, according to recent data published by the Central Statistics Bureau in honor of International Women’s Day – celebrated on May 8.Israeli Women Continue To Make Less Than Men

The bureau did find that in the past year, women have climbed further up the corporate ladder, with the percentage holding managerial positions having nearly doubled what it was in 1990.

The number of women who work while attending an institute of higher education also is significantly on the rise from observations in the past decade: from 39% to 48%.

The differences however in salaries, remain similar despite the progress made by women in the workforce. In 2008 the average male monthly salary was $2,548, while the female average was only $1,609 – or 37% less.

One explanation is this: women tend to work shorter hours than men, but hourly rates were also compared and found to be different, with women making 27% less than men on average, per hour.

The bureau’s data also shows that 152,500 women gave birth in 2008. Sadly around 11% of all pregnancies were aborted. Israeli women give birth to three children on average and live to the age of 83, while the average life expectancy for men is 79 years.

The bureau found that of all women aged 20-45 who worked and gave birth, around 25% ceased working, while just 1% of men stopped working due to a new baby. 16% of women lessened their work hours after giving birth, while just 3% of men were found to have done the same.

The number of women studying for their bachelor’s degree is steadily rising, with numbers reaching 55% of all students in 2008. 58% of all students studying for a master’s degree are women, as well as 52% of those found in the process of acquiring their doctorates.

Women are present in the highest percentage in education studies – showing 86%, as well as nursing – showing 81%. Though in the fields of architecture and engineering their numbers are lowest – just 27%.

I Scream You Scream We All Scream For…

Just in time for the summer…the Ben & Jerry’s ice-cream entrepreneurs from Vermont will open a new factory in the Beer Tuvia area in the south, near Kiryat Malachi, in a facility that until recently was a soup factory and logistics center for the food manufacturer Vita Pri Hagalil.

Some NIS 8 million – or about $2 million will be invested in the new factory, which will employ dozens of workers, and comply with standards set by the global Ben & Jerry’s corporation as well as the European markets and the US food authorities.

The company’s previous factory in Yavne was closed after it failed to meet the exporting standards set by the ice-cream mogul.

The new plant will produce Ben & Jerry’s ice-creams in addition to baked frozen items that are marketed in Israel under the brand name “Rosie’s” and include pancakes, blintzes, bagels. Yummy! In addition to all of this, the company will open a new retail store in Modiin.

According to Ben & Jerry’s General-Manger Avi Zinger, another retail store is slated to be opened next month at the new Cinema City which is in Rishon Lezion – and that’s in addition to the one already operating in Glilot.

The company is currently conducting negotiations for opening another store in Jerusalem as well. Ben & Jerry’s annual turnover in Israel is estimated at some NIS 30 million – or about $8 million.

Along with the expansion of production facilities, Ben & Jerry’s will also be planning on expanding their parlors to 16, as well as selling kiosks.
Zinger says:

“Ice-cream parlors have regained momentum in recent years, and we have also returned to full activity…Ben & Jerry’s opened its first store in Israel in 1988 and operated 16 branches at its peak. In 2001 it began to close down its stores dew to losses suffered with the break of the intifada and the era of increased terror attacks.”

One Good Avocado

The sales of Israeli avocadoes have reached one-third of all fruit sold in Europe. The Israeli company Agrexco was defined by the Wall Street Journal as the biggest Israeli exporter of fresh agricultural produce of high quality.
2009 saw a 12% rise in Agrexco’s sales turnover and the company leads Israel’s agricultural exports this year. Last year, the company exported agricultural produce under the Carmel brand for about € 492 million (about $663 million).

Agrexco CEO Shlomo Tirosh told the paper that Israel markets 390,000 tons of fresh agricultural produce to countries all around the globe, with avocado taking the first place. This season, the fruit’s exports are expected to reach 36,000 tons compared to 22,000 last year – an increase of more than 50%.

Pepper came in second with about 36,000 tons, in spite of the difficult winter in the Arava region. It was followed by organic and conventional tomatoes, mainly cherry tomatoes.

Green herbs have also had a strong international export presence – particularly basil, chives and mint. Despite the competition from Egypt, Morocco and Spain, the Israeli herbs’ popularity is quite stable due to their high quality. In addition, the sales of Israel’s melons have risen by 50% after several years of decline.

Israeli Economy Continues to Recover

The economy in Israel grew at an annualized 4.4% in the fourth quarter of 2009. This is its strongest spurt in nearly two years, while the nation continues its recovery, quickly, from a short downturn.

The Central Bureau of Statistics on Tuesday also left unchanged the third-quarter growth, which was of 3.0% and the full year 2009 estimate that the economy grew 0.5% to NIS 763 billion which is $203 billion.

The economic forecast for 2010 is that we will witness roughly 3.5% growth.

The growth which we saw in the fourth quarter was the highest since the first quarter of 2008, when the economy grew 5.5%.

After contracting an annualized 3.1% in the first quarter on the dawn of the global crisis, Israel’s economy grew 1.2% in the second quarter and 3% in the third quarter.

Also, the per-capita gross domestic product grew 2.4% in the fourth quarter.

The growth in the final three months of last year was fuelled by a 33% surge in exports and a 4.4% rise in consumer spending, the bureau said in its first estimate of fourth-quarter GDP growth.

In addition to this, imports rose 13.8% while investment in fixed assets fell 9.4%.

Can You Hear Me Now?

You might have heard this story. When Barack Obama became the president of the United States of America, he was told that he could no longer use his personal BlackBerry to receive e-mails, for the reason that it is not secure. Shortly after he took office, however, press reports emerged that one of America’s government agencies had succeeded in creating an encrypted BlackBerry, which had been specially designed for President Obama.

The IDF is considering doing the same and in the coming year plans to choose a new phone model to be used by commanders for the “Mountain Rose” encrypted military cellular network.

Mountain Rose is a completely secure network that enables IDF commanders to communicate with one another via cellular phones that can also be operated from behind enemy lines, as they were during Operation Cast Lead in the Gaza Strip in 2009 and the Second Lebanon War in 2006.

In comparison to cellular phones used by the public, the model used by the IDF – designed by Motorola according to military specifications – is too bulky and large.
Following Cast Lead, OC C4I (command, control, communications, computers and intelligence) Directorate Major General Ami Shafran ordered his staff to propose a new device that could replace the phones currently used for the Mountain Rose network.

Under consideration is the BlackBerry as well as Apple’s I-Phone. The IDF is also planning to expand the bandwidth of the network to enable the new devices to receive live video footage from unmanned aerial vehicles, as well as to hold video-conference calls.

Coming Soon: Hittin’ The Links in the Holy Land

How will Israeli work to further entice worldwide tourists, to come over and play? How about warming up to the world of golfers!

The Tourism Ministry and the Israel Land Administration are planning an NIS 760 million grant, for the building of 16 golf courses across the country, over the next 15 years.

The golf courses could see a 20% increase in hotel occupancy and the average amount of money being spent by tourists may double from $1,000 to $2,000. Sounds like a pretty worthwhile investment.

Tourism Minister Stas Misezhnikov says that encouraging golf tourism will encourage both local and foreign investments. The goal is to get golf aficionados to visit the Jewish Country, every year – helping it to compete with other Mediterranean Basin nations.

The Tourism Ministry and the Israel Land Administration will begin scouting for sites to build courses. So far proposed initial sites are at Eilat, the Dead Sea, Tiberias, Hatzor HaGilit, Savyon and Rishon Lezion.

Well kids…It looks like it’s time to polish the clubs and work the kinks out of that swing.

Bringing Down Israel’s Debt and More Financial Scoop

This week the International Monetary Fund (IMF) urged Israel to phase out an unconventional monetary policy – by which it intended the Bank of Israel’s habit of intervening in the country’s forex market.

Actually, the Bank of Israel had ceased this activity during a two-month hiatus but just began again by buying between $100 million to $200 million. By mid-day the buying pulled the dollar’s exchange rate from NIS 3.77 to NIS 3.80.

Market sources said that the central bank’s move was designed to “soak up a surplus supply of foreign currency” which had caused a sharp appreciation in the “basket of currencies.”
The IMF also called on Jerusalem to put together a plan which would sharply reduce Israel’s high public debt burden.

Recent increases in short-term interest rates, in both August and December, were “appropriate” to prevent an uptick of inflation as the economy recovers from recession; and Israel applauds herself on her handling of the fiscal disaster.

However the IMF urged the central bank to stop intervening in the foreign exchange market and to restore the shekel’s status as a free-floating currency.

Regarding Israel’s debt, the IMF recommends that the country reduce its ratio of debt to gross domestic product, to 70% by the middle of the next decade, and aspire to a ceiling of 60% by 2020. It is expected that the ratio will “edge up” to 80% by the end of 2010.

MIZZE Designer Jewelry Made for Luck

MIZZEWhen the Jews of the Diaspora began moving around the world in an attempt to assimilate into new societies while sustaining their own culture, they found success in two main fields; the first was as money-lenders and the second was as artisans. There is something in the Jewish Neshama that lends itself to creative output.

As most of you know, Israel has become a global fashion hotspot; a volcano of new trends and hip and fashionable wear. A new jewelry line out of Israel called MIZZE is an example of this Jewish flare for creativity and originality.

MIZZEMIZZE is a designer line of casual jewelry, and they say that it is all “made for luck.” Because we live in such hectic times, Mizze’s jewelry focuses on balance and positive spiritual energy. They’re necklaces, anklets and bracelets are casual and everyday type of wear, however they bring the Mediterranean breeze from the Tel Aviv coast to where ever the person wearing them travels.

MIZZEThe line is designed by a completely independent studio here b’Eretz. Everything is crafted by hand and made with natural materials. The chords employ traditional patterns in knitting and weaving; and the charms are ancient symbols with the occasional embedded script of both modern Hebrew and ancient Hebrew characters.

The seamless blending of hip contemporary style with ancient Jewish themes by Mizze is very nouveau-Israeli and can be found at fine retail outlets and jewelry stores.

More Clashing of Worlds in Jerusalem

Despite some violence and 1,500 ultra-Orthodox protesters, shouting”Shabes! Shabes!” Intel Corp. says that it has no plans of closing down their chip making factory in the industrial zone of Har Hotzvim on Shabbat.

MIDEAST ISRAEL PALESTINIANSThe protests were sparked by Intel’s opening of a new facility near the ultra-orthodox area; the company has operated on Saturday’s for more than twenty years, and plans to continue to do so.

Intel is one of Israel’s biggest corporate supporters. They first opened a plant in Haifa in 1974 and in Jerusalem in 1984. By the year 2000, they employed more than 4000 Israelis.

Most businesses in Jerusalem close down for the Sabbath and those which stay open tend not to be located near haredi neighborhoods. There has always been tension in Jerusalem between secular and ultra-Orthodox Jews, who make up one third of the city’s population. Well starting last year, things began to get worse. First, voters elected a secular mayor to replace the ultra-Orthodox incumbent, and then City Hall decided to open a municipal parking lot on Shabbat near the Meah Shearim neighborhood. These instances have been the cause of much controversy and violence over the last year, occasionally splashing onto the headlines.

What we have here dear readers is a “failure to communicate” as Paul Newman once put it in “Cool Hand Luke.” Who is right and who is wrong? This is a mere reflection of the case of the disappearing public sphere in the Jewish Country. There needs to a modifier, a common law to entice both sides to come together. It should be the blending of ancient Torah values, with modern Zionist vision; and an effective change of attitude should start in school.

Tnuva Cottage Cheese Hits New Jersey

I got this from my people in NJ – they walked into Kings and saw this. Mazal Tov Tnuva!
It’s about time the good people of NJ found out what real Cottage Cheese tastes like!

Tnuva Cottage Cheese

Tough To Kill: Israel’s Economy and the Global Economic Collapse

“When it comes to U.S. military résumés, Silicon Valley is illiterate. It’s a shame. What a waste of the kick-ass leadership talent coming out of Iraq and Afghanistan.”


AzrieliAlthough it goes humbly un-boasted – perhaps due to antisemitism and worldwide Zionist bashing – Israel has managed to thrive during the recent global economic crisis. Actually Israel’s economy “has the highest concentration of innovation and entrepreneurial ism in the world today”.

What is at the root of Israel’s steadfast success? Is it because a country of G-D’s Chosen people in their homeland is bound to kick ass? Is it the subtle socialist shadows, inspired by the likes of Theodore Herzl, which are still sort of cast over a competitive and modern national work ethic, which encourages capitalism?

These factors may play a role, but upon recent analysis done and expert consensus, the main factor seems to be its very unique government policies having to do with immigration, disproportionate research and development spending and last but not least its universal military training and national service program.

While teenagers in other countries, namely the United States are sweating over which college they can get accepted to, Israelis are racking their brains to be accepted to one of the country’s top military units. In fact, in Israeli culture, the most elite military units are the equivalent of the Ivy League, in the United States. In the Jewish country, which brigade and what duties an applicant was involved with in the army holds the most weight and is the most influential factor in a job interview.

An 18 year old British navy veteran named Gary Shainberg, who is now the vice president of technology and innovation for British Telecom said:

There is something about the DNA of Israeli innovation that is unexplainable. I think it comes down to maturity. That’s because nowhere else in the world where people work in a center of technology innovation do they also have to do national service.”

Ever since the State of Israel won its independence in 1948, the future of its existence has been in question. Such a threat has an amazing effect on an economy and gives individuals a psychological incentive to succeed. Life in Israel is fast-paced in every sector of secular culture; therefore ideas get drawn up faster and put into execution faster.

According to the Organization for Economic Cooperation and Development (OECD) 45% of Israelis have a university education, which is among the highest percentages of nations worldwide; this data goes without mentioning an even higher percentage of military experience among citizens, nearly unanimous, which also has a positive influence on the economy’s attitude.

According to a recent study in theIMD World Competitiveness Yearbook, Israel was ranked 2nd out of 60 developed nations on the criterion of whether “university education meets the needs of a competitive economy.”

To date, Israel’s economy has the highest concentration of innovation and entrepreneurial ism in the world. She is the world leader in the percentage of a nation’s economy which is spent on research and development, and the pay back is huge.
In 2008, when the recession was beginning, per capita venture investments in Israel were 2.5 times greater than in the U.S.

That’s more than 30 times greater than in all of Europe, and 80 times larger than in China; while 350 times bigger than in India.
Currently there are a total of 3,850 successful start-up companies in Israel. That’s one for every 1,844 Israelis. More Israeli companies trade on the NASDAQ than companies for all of Japan, Korea, China, India and Europe, put together!

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