BloGiza

Our Latest Internet Investment: WinBuyer

We were pleased this week to officially announce Giza’s investment in WinBuyer, one of five investments we’ve made this year and the latest addition to Giza’s Internet portfolio.

WinBuyer is one of the most interesting Israeli companies working in the e-commerce space, and a leader in the new and growing field of Onsite Comparative Pricing (OCP). The company’s technology enables online retailers to bring comparison shopping to their own sites.

E-tailers running the WinBuyer solution can then display competitors’ prices for a specific product on that product page. Buyers get the benefit of the comparison shopping experience without having to jump back and forth to Google or to external comparison shopping sites.

“But why,” I can hear you shout already, “would any online merchant possibly want to display competitors’ prices on their own sites?” A legitimate question. The answer, counter-intuitively, is that by doing so they actually increase conversion to sale and average cart size.

OCP helps online retailers by increasing transparency and creating a greater sense of trustworthiness. And this works even if the retailer displays prices cheaper than his own. The WB application allows e-tailers to define how many results to show, and whether to lower prices from competitors as well as higher ones.

Psychologically, many consumers want to know that they are getting a fair deal rather than the absolute cheapest prices.

By increasing price transparency, WinBuyer’s solution can actually help e-tailers step back from an increasingly destructive spiral of price-cutting and help consumers focus on other aspects such as service and reliability.

And because e-tailers receive part of the affiliation fees if their users jump to one of their competitors’ sites from the WinBuyer widget, it also allows e-tailers to monetize part of the traffic they would have lost in any case.

Online retailers increase their revenues, users get a better e-commerce experience. A classic win/win.

To date, WinBuyer has deployed its solution on more than 200 sites. Most recently, Overstock.com, one of the major online retailers in the US, has adopted WinBuyer in many of its product categories including books and electronics.

WinBuyer is led by a terrific team, including Founder and President Miki Balin, CEO Dan Clarke, and Founder/VP R&D Alon Weinberg. We are looking forward to great things with these guys.

Surfing on a Wave of Marketing Problems

Over the last couple of weeks, nearly everyone in my social network who has any connection to the tech world has begged (sometimes desperately) for an invite to Google Wave. This is reminiscent to the kind of excitement that GOOG managed to generate a few years back when it first started handing out invites to Gmail, but greatly balloon-ified.

Going by the hype being generated, it seems clear that Wave is destined to become the next big online thing.

Or is it?

I’m not entirely certain. (Full disclosure at this point: I am one of the sad proles still waiting to try out Wave. The opinions contained herein are based not on what Wave is, but what it appears to be, which is just as crucial).

Google has launched and killed more than its fair share of applications and services over the years without too many issues. But I think what we’re seeing here, at least in the short run, is the company’s first high-profile product marketing flop.

There are a couple of reasons IMHO:

1. Overselling the undefined - For all the techheads desperate to play with the shiny new toy out of Mountain View, I’m not sure how many would be able to describe what Wave actually is in two sentences or less. Google has done a pretty bad job explaining it so far.

Take the lengthy accompanying video (see above). It paints the new technology as an amalgamation of all the online communications tools available today, but redesigned to fit the needs of the 21st century. From this has arisen much talk that Wave is the ultimate email/blogging/chatting/Twitter/whatever killer.

The reality of the matter is a bit more prosaic. The main use case appears to be online collaboration. But collaboration tools are not mainstream consumer applications. So does this mean that Wave is more for businesses? And if not, then what can regular people do with it better than what they can do with email/chat/Twitter/whatever?

I would imagine that all these issues will become a lot clearer once Wave starts growing its user base. But in the meantime there will be a lot of disappointed people thinking they are going to get some nebulous-but-nonetheless-super-nifty Thing A and instead get Thing B which doesn’t suit their needs.

2. Rollout tripping on early buzz – At the moment, not a lot of people have gotten their paws on Wave. This is unsurprising, seeing how Google is rolling it out slooooowly in order to ensure proper scalability and stability.

However, many among the lucky few who have used Wave are less than thrilled with it. Most notably Robert Scoble, who wrote a sharply worded entry on his first impressions. Scoble paints Wave as being both cluttered and a productivity timesink.

Scoble is joined by numerous other early adaptors in talking down the new product. And this combination of slow rollout + negative early publicity gives potential Wave users plenty of time to read the rotten reviews without trying out the application for themselves. Not the optimal combination from a marketing perspective.

3. Privacy issues – Even assuming that Wave manages to overcome the above problems, it is still likely to run into a number of other thorny issues, primarily in the realm of privacy. On the one hand, the collaborative nature of the application allows anyone to see what you are writing in real time, which I suspect will turn a lot of people off.

Then there are the continued questions of just how much of our personal and business information Google has access to. Wave will only make the debate thornier.

None of this leads me to conclude that Wave is heading into the land of epic fail. Google has enough money and enough time to fix all but the most horrifying mistakes. However, for a company that has managed to become the Web’s reigning monster without too much vocal opposition, this is an uncharacteristically high-profile boo boo.

Time to Headup

Ladies and gentlemen, allow me to introduce what I believe will this year’s insanely nifty Internet development – Headup.

So, what is Headup? Headup brings a bottom-up Semantic Web approach to discovering and organizing information on the Internet. Translated into English, Headup is a browser add-on (currently for Firefox) which understands the context of information on a Web page and automatically fetches a wide variety of additional relevant information. Better yet, it finds information that is relevant to a specific user based on his/her social graph.

What Headup does is:

1. Finds information that you might not discover yourself
2. Saves time and effort by enriching your surfing and searching
3. Does all this while still protecting your privacy

The technology behind Headup connects data sources on the Web, be they news sites, blogs, photo- and video-sharing sites, and social networking services in a semantic, contextualized way and start making smart connections between them.

For example, the technology recognizes that “Joy Division” when you are looking at Amazon’s music section is the same Joy Division on Wikipedia, YouTube, Last.fm, and your friends’ “Favorite Music” section on their Facebook profile. It then aggregates all this information and presents it to you in a useful interface that doesn’t take you away from the original page you started with.

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The service is incredibly useful in a number of ways. It makes connections and finds information that you wouldn’t necessarily come across by yourself. I find that by headupping my Facebook friends, I often find blog postings and information about them that isn’t in their profile, not to mention shared interests that we have and upcoming events.

It also automatically enriches search results. When you google something, the search results automatically come back with a headuppable link. The Headup link saves you many next steps that you would automatically take, by bringing you the relevant search results, blog posts, and pictures.

Throughout it all, Headup is watching out for your privacy. Your personal information is stored locally, on your computer. The Headup servers do not store any personal data.

Headup has been developed by SemantiNet, one of Giza’s promising Internet portfolio companies. Although the application is currently only available as a Firefox add-on, it will soon be available for other browsers and a client-less version of the technology is on its way as well.

The application is in open beta and I strongly recommend everybody try it out. Let us know what you think.

Internet is Fun!

Another one out of the gate!

This week marks the official public launch of a second Giza Ofek Program company. This time around, the company is Viral Gurus who have opened their site to the big wide Internet.

Viral Gurus operates a site called Internet Is Fun. The name is pretty descriptive: Internet is Fun provides you the user with a new way to share all those interesting video clips, slide presentations, jokes, sound files, and other fun stuff that you normally get via email.

Internet is Fun still allows you to email these things to your friends and acquaintances. But it also adds a couple of new and useful functions. For instance the service allows you to:

• Have a discussion with your friends about a specific item - Does that YouTube video you got remind you of Haim in accounting? You probably won't leave a comment to that effect on YouTube, but you can here where it's relevant
• See how an item got to you and how it spread once you forwarded it - Internet is Fun tracks the viral spread of each item. You can see the chain of friends that led the item to your doorstep. More interestingly, you can see how an item spread out once you forwarded it. You send it to 10 friends and two weeks later more than 2000 people have seen it - cool!
• Collect all your fun items in one place - Internet is Fun automatically saves all the items you upload and forward to your own personal, customizable page, your "funblog". (This is like what Tumblr and similar microblogging sites enable you to do).

The site is open to everyone. You can check out my own funblog here. Feel free to friend me and let the fun begin.

Introducing: IMScouting

Attention football fans: IMScouting is here!

Today marks the official public launch of IMScouting, one of Giza’s Ofek portfolio companies, which has developed an information service for the professional football industry (“soccer” to you guys in the US).

In short, IMScouting aims to be the world’s leading information source for professionally traded football players. The company maintains an in-depth database of players from across the globe, and offers a wide range of features including:

•    Full statistical information on players from over 40 countries
•    Exclusive professional performance evaluations
•    Injury reports
•    Comparison graphs
•    Video highlights
•    Contract information
•    Market values and salary estimates

The full IMScouting service is aimed at football professionals: scouts, agents, managers, coaches, and anyone else needing in-depth information about players.

However, the site has plenty to offer even if you are not a professional. IMScouting’s free open area contains all the statistical and performance information, as well as an advanced search engine. You can use it for all your fantasy football needs or just as a useful complement when reading the sports pages.

IMScouting was founded by Ronen Carmona and Zeev Reznik, two entrepreneurs with a real passion for the sport (and in Zeev’s case, an insane amount of knowledge about the football industry). Giza invested in the company at the beginning of 2008 along with a group of angels.

What did we see in this investment? First off, two very passionate founders. Secondly, an interesting relatively untapped vertical: Football is a multi-hundred billion dollar global industry. Thousands of players are traded each year, but despite this football professionals don’t have a good way to search for talent. IMScouting hopes to answer this need.

Third, the company has a key competitive advantage. The founders managed to recruit Pini Zahavi, who is considered to be one of the world’s leading football agents. Pini, who operates here and in the UK, has been involved in many of the highest-profile transfers in European football over the last two decades. He serves as a member of the IMScouting board and is highly active in helping promote the company.

We wish the guys the best of luck and invite everyone to check out the site.

Many Communication Options = Worse Communication?

Over the last couple of months, I have developed a growing addiction to social media. Where a year ago my main channel for interaction with friends was email, followed by email and Facebook, nowadays it increasingly includes Twitter and shared links via RSS readers. Not to mention FriendFeed, which is a mélange of everything else.

However, no real framework governs all these tools. Some people you contact via email, some people you send messages to in Facebook, some people you tweet. Some people you talk to across multiple channels oftentime continuing a conversation across multiple platforms.

Which is all great in theory – more ways to communicate between people should lead to more and better communications. Except that I’m beginning to think this isn’t actually the case.

I’ve had a couple of examples in recent weeks where I’ve contacted someone on Facebook regarding some issue fully expecting the person to respond via Facebook. Except that the person doesn’t respond until days later and I realize I should have actually emailed (or, heaven’s forbid, phoned) them. 

Or, I find myself having running conversations with people via tweets and private messages on Twitter. Except that Twitter was never built to be an effective tool for two-way conversations and eventually the whole exercise gets so frustrating that I go back to email.

The explosion of social media choices does provide us with a lot more options for communications. But lacking a good framework for organizing and keeping track of these conversations, it mainly seems to increase the noise.

Sergey @ The Garage May 15

We had the honor of co-sponsoring last Thursday's Garage Geeks event in which Sergey Brin came down to Holon to pay a visit to the Garage. Several hundred people showed up (apologies to everyone who asked me for an invite last week - space was really limited) to bask in the man's Google-y glow.

Sergey actually stayed for quite a while, close to two hours. At first, he seemed a little surprised at the rock-star reception he got. Either that or the poor guy was just trying to eat something while everyone mobbed him. But later in the evening, after some presentations by the Garage crew, he got up on stage to give a little talk and answer questions.

The Q&A session was also surprisingly lengthy. (Ayelet Noff has posted a video of most of it which you can find here). I'd be lying if I said that we heard some earth-shattering revelations from Sergey, but here are a few of the more interesting tidbits:

• When asked where Google is focusing its attention these days, Sergey mentioned both Android and RE>C (Renewable Energy Cheaper than Coal), Google's cleantech initiative. I'm actually kind of thrilled to hear this. Along with the proliferation of the iPhone and similar devices, the rise of Android may finally help launch mobile Internet as a mainstream application. Google is one of the few companies that can leverage its size and prominence to introduce new standards and paradigms for the mobile world, so all the power to them. And although Sergey claimed rather politically that Google and Apple are not competitors here, it will be interesting to see how the dynamic plays out.

• Someone asked Sergey if Google was planning on buying Yahoo, which led him to tell the story of the first time the two companies met. In his telling, it was in late '96 or early '97. He and Larry had put together a small company already and approached David Filo with an offer: Give us a couple of million dollars and we'll develop a good search engine for you. Yahoo passed on the offer. In retrospect, Sergey says he understands what Yahoo was thinking -- a couple of crazy kids with an idea come to you asking for a lot of money and it seems a bit ridiculous. But from such events is history created.

• Charmingly, Sergey brought along his parents. Which led Yossi Vardi, who helped bring Sergey to Israel, to point out that in the eyes of Sergey's mother, despite the fact the guy has gazillions of dollars he still hasn't finished his PhD. Sergey says that he plans to finish the doctorate one day.
  
  Now, being that we are all a bunch of provincials, someone had to ask when Sergey is planning on making aliyah. To which, a number of people in the audience shouted "after he finishes the PhD."

• Google's "70/20/10 rule" -- 70 percent of focus on the core business, 20 percent on ancillary businesses, and 10 percent anything-goes projects -- seems to actually track in real life.

• Sergey's favorite application -- Panoramio, an application over Google Earth which shows you pictures from any given place. Which is kind of like Flickr's geotagging feature that no one seems to use.

In short, an interesting evening and a chance to catch a bit of the magic. More on the event can be found here.

A few harsh words about the local Internet

Let’s talk about our local, homegrown Internet scene.

For those of you who might not know, Israel has over the last decade and a half developed its own Hebrew-speaking Internet industry complete with Hebrew-language portals, news sites, social networks, blogs, e-commerce, and marketplaces.

By and large, everyone in Israeli high tech (the main, overseas-facing high tech industry anyway) ignores the local Israeli Internet. The world of .il seems uninteresting and irrelevant. I have often attempted to buck the trend and gone off spelunking into the Hebrew Internet looking for undiscovered gems. Just as often, I have come back disappointed and I think I am now about to give up altogether.

The latest impetus came a few weeks ago at the Comvention. As with every year, it was a two-day event. The first day featured talks held in English with numerous guests from overseas. The second was conducted in Hebrew and focused on the local Israel-centered industry.

Very few of my colleagues showed up on the second day. In fact, very few people I knew showed up on the second day, even though the convention center was packed. I would estimate that the overlap in the crows between the two days was less than 10 percent. And this is but one indication of the problem at hand. Simply put, the local Israel-facing Internet is small, provincial, disconnected from the outside world, and two or three years behind everybody else.

One of the panels on the second day of the Comvention was entitled “The Israeli Internet – Sleeping Beauty?” To which Gadi Shimshon, a prominent local Internet pioneer, snorted, “Sleeping Beauty? More like a fuggo in a coma.”

He’s right I think. There are a number of dispiriting issues at play in .il:

• Attack of the Blinky Ads –The average American web site has 14 ads on it. In Israel, the average is closer to 100 (I’m not making this up). Click on any major Israeli Internet site. Now shield your eyes. You are immediately assailed by a wide variety of intrusive Flash ads, popups, video clips that start playing automatically, and every other manner of annoyance you can imagine.
  
  While annoying in and of themselves, blinky ads represent a deeper problem: the immaturity of online advertising in Israel. At the Comvention, Kfir Pravda gave an interesting talk about new trends in online video monetization. He talked about viral campaigns and interesting product placement technologies, among other things.
  
  The crowd – which was comprised mainly of ad agency employees – lapped it up. At the end of the presentation, however, a number of people stood up and said that while they would love to introduce more clever and effective advertising online, their clients the advertisers won’t hear of it. Local advertisers don’t want something new and subtle. They want the same old annoying hard-sell with the same old easily measured parameters.

• Firefox? Not here – I challenge my readers to come up with one major Hebrew-language website that renders properly in Firefox. YNet is about the only one that comes close and even then gets tripped up with embedded video. Hebrew sites don’t do Firefox. And I won’t even mention Safari or Opera, heaven forbid.
  
  To some degree, this represents very successful missionary work on the part of Microsoft which for years has actively nurtured generations of local .Net programmers. But it also indicates a real disconnect with the outside world. The main non-IE browsers now account for nearly 25% market share. But you’d never know that here. Local developers ignore alternative browsers because they never encounter anyone who uses them. It’s a closed loop.
  
  The same goes for all them fancy new Web 2.0 services such as Twitter or Digg or De.licio.us. If there isn’t a homegrown version, then nobody knows what you’re talking about nor sees the need.
• Lack of Internet culture - In general, Israel does not have a civilized Internet culture. On the one hand you have the often-hateful “talkback” environment wherein portals and content sites are shot through with ugly user-generated slander. On the other hand, you have Knesset members constantly coming up with new laws whose main purpose is to censor the Internet. Either that or demonstrate that the people in charge of the Internet in this country don’t understand how it actually works.

In short, situation not so good. Somehow, the same country that can produce Internet successes like Yedda and FoxyTunes craps out when it comes to producing homegrown fare.

So, why do I care? I focus on companies which are by definition outward-facing. So, why waste 1000 words on the irrelevancy of the local scene? Because as long as Israel cannot produce local Internet sites that are connected to the world at large, we limit the pool of talented local developers and entrepreneurs who could build the next great outward-facing Internet property.

Does anyone have any ideas what can be done?

The online year that was

As today is the last day of 2007, it’s a little hard to resist looking back at the past year and trying to sum it up. So, I won’t resist. Unlike last year, 2007 is hard to summarize with one handy tag such as “the year of online video” or “the year of social networks”. There was a lot of activity in a number of different areas, the rise of a major player in the social networking space, and the rise of a new form of communication.

So, herewith a few highlights IMHO of the online industry in 2007

Story of the year: The consolidation of the advertising industry
Y’all thought I was going to say Facebook, right? Now, while the rise of Facebook is certainly the most hyped story of the year, my vote for the most significant development  (not to mention the biggest source of M&A activity) is the rapid consolidation of the online advertising space.

During the last 12 months, Google bought out Doubleclick for $3B. Shortly thereafter, Microsoft acquired aQuantive for a staggering $6B. AOL bought out targeted ad firm Tacoda, as well as Quigo which. Yahoo acquired Blue Lithium, as well as a majority stake in Right Media. WPP bought 24/7 Real Media. And the list actually goes on.

The M&A hyperactivity in this sector is an indication of the fact that online advertising has reached a certain stage of maturity. Beyond that, the consolidation is likely to have long-term ramifications, especially in regards to the rise of Google as the behemoth of the information age as well as the development of new business models online. And that’s what makes this, at least for me, the biggest development of the year.

Phenomenon of the year: Facebook
Obviously, I couldn’t not mention Facebook which gained momentum extremely rapidly this year and became the go-to social network for those of us who aren’t musicians, 14-year-olds, or skeevy perverts. Facebook only opened itself up to the world outside the university sphere towards the end of 2006. I joined up early this year. Before long, almost every high tech-ist I knew (and many I didn’t) was on it. Lately, the sphere has expanded further and everyone, their parents, and their parents’ friends are connected. Clearly we’re on to something.

Of course, it will be interesting to see whether Facebook will be an ongoing concern for most people or just a passing fad. I like it for business purposes, as a tool for microblogging, and as the communications platform of choice for a number of my friends. On the other hand, I have a hard time answering those who complain that there’s nothing to do there. We shall see.

New technology: Microblogging
The rise of Twitter and its clones provided us with probably the only real new media form we’ve had in a few years, viz. microblogging. At first, the concept seemed a bit stupid. After all, why would I want to blog in tiny, one- or two-sentence bursts? But then you start getting into it and discover that Twittering (or updating your Facebook status, which I tend to do more) is a nice complement to blogging for those times when you have something small and/or clever to say but which doesn’t warrant an entire post. Plus, it’s the first Internet app that makes perfect sense for the mobile. It’ll be interesting to see who snaps up Twitter and for how much.

Interesting development in local tech: The renaissance of the Israeli internet scene
Three or four years ago, it seemed that the Internet industry in Israel was close to dead. During the days of the ’99-’00 bubble, the high tech scene was awash in Internet startups looking to be the next ICQ. Then the bubble burst and most of the companies went under. Worse, the VC industry was burned on the subject and it subsequently became almost impossible to get a new Internet startup funded.

As recently as two years ago I regularly had colleagues in the VC world lecturing me that Israel was incapable of producing Internet companies and, besides, these types of investments weren’t suited for VC anyway. What a difference a few years and a YouTube (and a Facebook) later make.

Once again, we are seeing dozens of new Internet companies each month. What’s more, there is a real feeling of an Internet scene here, helped along in no small part by Facebook, the work of groups like the Co.ils and the Geek Garage, and of course Jeff Pulver’s social activities. Let’s hope this continues to develop and mature.

Case of possible overhype: Online video
I’ll catch some crap from friends about this, but the online video space has become somewhat overhyped in the last year. Actually, that’s kind of unfair. What has happened is that in the post-YouTube age, online video has become ubiquitous. This has led to a lot of noise and a sense of, “Ok, what do we do now?”

Towards the end of last year, it looked like the field of mid-tail, independently produced video content (e.g. Ask a Ninja, Rocketboom, Ze Frank) would be the next big thing. As of now, that has failed to happen. There haven’t been any real breakthroughs this year. Even projects as big and as hyped as Joost have yet to take off as a mass-market application.

I still have big hopes for this sector, but it may have to wait until sometime in mid-2008.

Predictions for 2008
You’ve got to be kidding me. Only fools make predictions in this online age where what you write will forever haunt you. Still, I’ll make some safe and predictable ones for the upcoming 12 months:

• There will be a number of huge-size Internet exits that will have people scratching their heads
• The whole notion of privacy will continue to erode as Google finds out more and more about you
• Mobile internet will remain where it has for the last three or four years, i.e. tantalizingly around the corner as the Next Big Thing
• Some technology or company that you’re not thinking about will be the big story of 2008

So, for all my celebrating friends and colleagues out there, I want to extend best wishes for the new year and hope that 2008 brings health, happiness and success to us all.

Congratulations to Yedda

A little bit late, I tip my hat to the good guys over at Yedda who recently sold the company to AOL for an undisclosed sum.

The Yedda exit is another indication that Israel's Internet scene is developing nicely, and begins to answer those who contend that Israelis are incapable of creating consumer-facing applications that appeal to an English-speaking audience.

In Yedda's case, founders Avichay Nissenbaum and Yaniv Golan and their team did an excellent job both with the UI of the site as well as with the clever and far-ranging business development. They leveraged the use of widgets and embeds to get Yedda out on as many sites as possible.

So, congratulations Avichay and Yaniv on a job well done.