Microsoft, Israeli ISP to Launch Hebrew Language Portal

Internet Gold (Nasdaq: IGLD), a leading Israeli ISP, announced yesterday that it has signed an agreement with Microsoft to establish a portal that will feature a Hebrew language search service.

The site will be called MSN Israel and will be running by the end of the year. The Rosh Haain, Israel-based Internet Gold — which is called Internet Zahav in its homeland — said that the two companies are “contemplating” a joint venture to run the new site. If the joint venture comes to pass, Internet Gold will take a 50.1 percent stake and provide the financing, while Microsoft will receive the remaining 49.9 percent stake. The site will be called MSN Israel and will be running by the end of the year. The Rosh Haain, Israel-based Internet Gold — which is called Internet Zahav in its homeland — said that the two companies are “contemplating” a joint venture to run the new site. If the joint venture comes to pass, Internet Gold will take a 50.1 percent stake and provide the financing, while Microsoft will receive the remaining 49.9 percent stake.

The portal will integrate Internet Gold’s existing portals, which offer e-commerce, on-line discussion groups and business services.

“We are very proud of our collaboration with Microsoft,” said Internet Gold CEO Eli Holtzman. “This step is part of our business plan to focus on content and e-commerce in preparation for the next millennium.”

Rising Use Prompts Changes

Like much of the rest of the world, Israel is seeing a rise in Internet use. It is estimated that the country has 200,000 Internet users — roughly 12 percent of households — and the figure is expected to grow by 50 percent in the year ahead.

E-commerce revenue in Israel has surged recently as well. Overall e-business is estimated to be closing in on $1 million (US$) amonth — a pittance when compared to the U.S. or European markets, but more than a drop in the bucket when compared to the previous year’s figure.

Israeli media companies have yet to jump on the bandwagon, but are expected to in the year ahead. Meanwhile, telecommunications companies are also starting to factor the Internet into their business equation.

ISPs Locked in Battle Access providers are on the front line of Internet use, and as the battles become more pitched, Israeli ISPs are developing their strategies. Internet Gold went public in the U.S. this past summer, selling 25 percent of its stock for a planned $50 million and giving it a capital leg-up on its competitors.

One looming competitor for Internet Gold is the national phone company Bezeq, which jumped into the ISP business last spring. The company, which holds a monopoly on the Israeli phone market, has been embroiled in controversy recently after it announced a tariff and fee hike.

A planned user strike against Bezeq fizzled out in August, but critics of the company believe that the company intends to lock out the average user. Bezeq counters by claiming that 64 percent of users would not be affected by price adjustments and that Internet use accounts for only 3 percent of its daily volume of calls.

The portal will integrate Internet Gold’s existing portals, which offer e-commerce, on-line discussion groups and business services.

“We are very proud of our collaboration with Microsoft,” said Internet Gold CEO Eli Holtzman. “This step is part of our business plan to focus on content and e-commerce in preparation for the next millennium.”

Rising Use Prompts Changes

Like much of the rest of the world, Israel is seeing a rise in Internet use. It is estimated that the country has 200,000 Internet users — roughly 12 percent of households — and the figure is expected to grow by 50 percent in the year ahead.

E-commerce revenue in Israel has surged recently as well. Overall e-business is estimated to be closing in on $1 million (US$) amonth — a pittance when compared to the U.S. or European markets, but more than a drop in the bucket when compared to the previous year’s figure.

Israeli media companies have yet to jump on the bandwagon, but are expected to in the year ahead. Meanwhile, telecommunications companies are also starting to factor the Internet into their business equation.

ISPs Locked in Battle Access providers are on the front line of Internet use, and as the battles become more pitched, Israeli ISPs are developing their strategies. Internet Gold went public in the U.S. this past summer, selling 25 percent of its stock for a planned $50 million and giving it a capital leg-up on its competitors.

One looming competitor for Internet Gold is the national phone company Bezeq, which jumped into the ISP business last spring. The company, which holds a monopoly on the Israeli phone market, has been embroiled in controversy recently after it announced a tariff and fee hike.

A planned user strike against Bezeq fizzled out in August, but critics of the company believe that the company intends to lock out the average user. Bezeq counters by claiming that 64 percent of users would not be affected by price adjustments and that Internet use accounts for only 3 percent of its daily volume of calls.

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