A glimpse at the Israeli tech

I have recently encountered some news articles discussing Israel and technology, so I thought I’d share a couple of observations: one about where Israelis are spending their time online and another one about the Israeli high-tech industry and its main challenge.

As to the first observations, it turns out that the five most popular websites in Israel are: Google (92.3%), Walla! (67.2%), Facebook (61.2%), Ynet (58.4%), and YouTube (54.9%). This is interesting and slightly surprising at the same time.  It is interesting because Facebook has outperformed Ynet and the Israeli equivalents of YouTube are nowhere near the top runners.  It is also interesting because US brands are occupying three out of top 5 places.  Of course in all of them, the users can do practically everything in Hebrew, but still, the local attempts to offer search, social networking, and online video, are not doing very well.

These statistics are also surprising, because there is an image of Israelis as being obsessed with news, but it seems like the social interactions are currently more interesting to them compared to the biometric database law and such.  Perhaps this is a sign of relative calm in the region.  Also, to me, one of the surprising aspects of the numbers above was that Walla! outperformed Ynet in popularity, because I was under the impression that Ynet is far more popular.  Perhaps that can be explained by the fact that Walla! offers not only news, but also email, shopping, and more (the exclamation mark in the name is there for a reason – they are taking the Yahoo! approach).  This may also be an explanation to why Ynet has recently offered its registered users a free email with unlimited capacity.

Asked explicitly about their browsing habits at work, the respondents to the survey listed the  same five websites at the top, but in a slightly different order: Google (87.8%), Ynet (52.8%), Walla! (47.9%), Facebook (31.2%),  and YouTube (25.3%).  It looks like the working people value news more than socializing and entertainment, but since I don’t have the actual survey in front of me, it hard to tell much.

As to the second observation, there is a new book out there, trying to analyze the success of the Israeli high-tech.  From its description the book sounds a bit too poetic (almost like a marketing brochure), but it cites  some interesting numbers and voices an important warning.  For example, there are around 3,850 start-up companies in Israel today and in 2008 the volume of venture capital investments in Israel was 2.5 higher compared to that in the US.  If you compare the per capita venture capital investment, the volumes in Israel are 30 times higher compared to Europe, 80 times higher compared to India, and 300 times higher compared to China (well, I guess this is one good thing about being a small country).  There are 63 Israeli companies traded on NASDAQ, which is the larger group of foreign companies from a single country on that exchange (the second largest group is Canada with 48 companies).  Finally, it turns out that Israel has one of the highest rates of investment in civil R&D in the world.  According to the article the country invests 4.5% (of its GDP I assume, because the article does not clarify that) in civil R&D, compared to 3.2% in Japan (the second largest) and 2.7% in the US (the third largest).

The book discusses a number of factors that contributed to the entrepreneurial culture and innovation in Israel (such as the immigration and combination of the army service and good higher education) and highlights one factor that endangers it all.  The authors, Dan Senor and Saul Singer, suggest that the state of the K-12 education in Israel is degrading and something needs to be done if Israel wants to maintain its innovative-entrepreneurial advantage – and I tend to agree.  I have not read the actual book, so I am not sure what exactly they are proposing, but I think it is good that this problem is getting attention in something that will probably become a popular read in the industry.