Barclays Capital came out predicting a quick end to the shallow Israeli recession, and a return to decent growth of 2.9%  by next year.  Keep in mind that the Israeli economy was late to the ‘recession game’ and looks to be an early ‘exiter’ from economic turmoil as well.

With all this great news Barclays said that they expect an Israeli Shekel/USD exchange rate of 3.65 buy the end of the year. That’s a big move from the 3.93 area that the currency is trading at now.

According to Globes: “Barclays sees a less severe recession in Israel, and relatively quick growth recovery. The investment house bases its optimism on the fact that about 75% of Israeli exports are high-tech goods, and Barclays says that a rise in the Tech-Pulse Index - showing a US high-tech recovery - points to stronger Israeli exports. The Tech-Pulse Index, measured by the San Francisco branch of the US Federal Reserve, tracks the US information technology sector.”

It looks like we have started to see this happen. As Tech has led the stock market turnaround in the US, Israeli stocks that trade in the US have been flying, up over 33% this year. Keep in mind that, like it or no, President Obama’s push for alternative energy sources will be huge for Israel, as Israel is one of the big global players in cleantech and water technology. If this trend of a ‘tech led recovery’ continues, look for the Israeli hi-tech scene, from small and mid-cap tech plays on the NASDAQ to M&A to Israeli VC, to have a very strong 2nd half of ‘09, and lights out for 2010.

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It’s been a good 22 years since I took French classes, and I was trying to remember the French word that best described the word’ Chutzpah’. Then I heard the news and the word became clear. The word is  Sarkozy.

Who does this guy think he is? According to a Ynet article: “Channel 2 reported Monday that during Netanyahu’s meeting with Sarkozy in Paris the latter said the prime minister should appoint Opposition chairwoman Tzipi Livni in Lieberman’s place. “With her and (Defense Minister Ehud) Barak you can make history”, he was quoted as saying. “I have always accepted Israeli foreign ministers, and I loved to have Tzipi Livni here at the Elysee, but with (Lieberman) I can’t,” he was reported as saying with a wave of his hand.”

Pardoner Mois! We don’t tell you how to run your foreign affairs so what gives you the right to tell Israel how to conduct domestic politics?

The reporting of this despicable act was met with a brilliant response from PM Avigdor Lieberman.  ” Speaking to Ynet, the official said “France has meddled in another democracy’s affairs. This is intolerable. We don’t plan on asking for clarifications from Paris, but rather intend to ignore the matter entirely. I am certain that if you ask Israel’s citizens who they want in charge of appointing their foreign minister, the answer will not be the French.”

Amen.

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Israelnewsletter.com had the opportunity to sit down with serial entrepreneur, Shai Wininger, about his new startup and hear how he enjoys running a family business.

Please tell us about your background.
Shai Wininger, Developer of Kotel Notes: I am a so called “serial entrepreneur” born and raised in Israel, married with two children and living in Haifa.

I then started to focus on the emerging mobile computing industry and started Handsmart (www.handsmart.com). Handsmart offered the first Adobe Flash generation platform for Pocket PC and Windows Mobile.  From there I joined forces with a leading mobile software company called Mobideo (www.mobideo.com) with which I co-founded a spin off for developing mobile software for the Aerospace Industry - “Mobideo Aerospace” (air.mobideo.com).

What is PushTuck and why Kotel Notes?

SW: Nowadays, along with my wife (who is a talented, highly-creative graphic designer), I’ve started a new venture called PushTuck.  PushTuck (which has a double meaning in Hebrew and English) is a family business aimed at developing innovative software for Apple’s iPhone and iPod Touch platforms. I think that in our case the words “family business” is literally the case (my kids do the quality assurance :)…

What’s the business model?
SW: I love simple things and I love easy-to-use software. I think that the basis for success in this competitive business is your ability to create compelling, clear, and low cost applications and then sell them to a mass market. That way you can make your revenues without being a financial burden for the home user. Apple’s software ecosystem allows us to do just that.

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Israelnewsletter.com had the opportunity to sit down with serial entrepreneur Yaron Galai, Co-Founder and CEO of Outbrain, who sold his last startup to AOL, to talk about his newest venture.

Can you tell us a bit about your background?
Yaron Galai, Co-Founder, Outbrain: I’ve been an entrepreneur since I can remember myself working… Actually realized recently that I have never in my life sent my resume applying for a job. I am now working on my 4th company called Outbrain. My first company, in which I was more or less the only employee…, was called NetWorks. It was one of the first web design shops in Israel. I started doing that around 1995 or 96 when the first Netscape browsers just came out. I ended up developing about 30 or 40 websites for companies in Israel. Doing this alone, I had to figure out all aspects of launching a website – HTML, hosting, design, SEO, etc. In retrospect I guess that was slightly insane, but it did give me some decent insight into the whole internet thing, as well as into running a business. I ran NetWorks for about 3 years, and all while studying product design at the Holon Institute of TEchnology (www.hit.ac.il), so it was pretty much all done on a moonlighting/weekend basis. This might have been part of the reason that I had failed to graduate and have never received an academic degree…http://www.outbrain.com/get/

After NetWorks I co-founded another company called Ad4ever which was a rich media ad serving platform. That company was later sold to Atlas, which was later acquired by Microsoft, but that sale happened way after I left the company so I can claim 0 credit for that happening.

I left Ad4ever because I had this idea for serving people on the web with interesting and contextually relevant links. I joined forces with my co-founder – Oded Itzhak – and we merged both of our ideas to one company which we called Quigo. After a couple of years of iterations, our product evolved into a contextual ad network. We ended up serving contextually relevant text ads on top-tier publishers, such as ESPN, ABC, FOX News, etc. That business grew quite nicely and we eventually sold it in 2007 to AOL.

Tell us about Outbrain.
YG: Outbrain’s goal is very simple – To serve readers of blogs and news sites with interesting and relevant links to other stories. I love reading blogs, magazines and newspapers, but I always feel overwhelmed with the amount of content that’s available. Blogs specifically create this massive flooding of content that’s impossible to sift through today. With Outbrain we wanted to help readers to easily find great articles or blog posts in an easy, quick and automated way. We offer bloggers and publishers a free service that they can place under each story they publish. Our system then automatically places highly interesting and contextually relevant links to other stories on each of those pages. For the blogger/publisher, this service provides a great user experience, it generates more traffic for them, and it gives some feedback on the content they produce. Again – the service is completely free, and can be installed in less than 2 minute on all major blogging platforms such as Blogger, TypePad, WordPress, etc:

We believe that good recommended links have to be personalized for each individual reader, and so over time, as our algorithm learns of the reader’s reading taste, our recommendations become increasingly personalized.

Have companies using Outbrain, seen an increase in traffic?
YG: Yes – all bloggers/publishers who install Outbrain see an increase in traffic. And as our service is completely free to the blogger, that increased traffic can be fully monetized by them with ads.

But that’s not the only way we let bloggers/publishers make money. We’ve also recently introduced an advertising program which we call Sponsored, But Good™. The idea here is to apply our same principals of serving interesting stories to our advertising. Advertisers pay us to drive traffic to interesting stories, reviews and blog posts written about their company. We put a lot of emphasis on ensuring that the stories submitted by advertisers are both authentic and interesting. We then share the revenue generated with the bigger bloggers/publishers, and let the smaller ones donate some of the revenues to a charity of their choice. More information about our Sponsored, But Good™ program is available here: http://blog.outbrain.com/2009/02/sponsored-but-good.html

So when a blogger installs our service, they don’t only improve their site and user experience, but can also make money in two ways – increased traffic that they can monetize via ads, and revenues from our sponsored link service.

What are the risks to your business? Is there any competition?
YG: Yes – there are quite a few companies that provide related link functionality to publishers and bloggers. Some charge money for the service, some offer contextual links without personalization, etc. We like keeping an eye open on competition, but don’t pay too much attention to it as we found it is much more important to listen to our customers (bloggers specifically). We’re pretty obsessive about supporting our bloggers and helping them be successful using the Outbrain service.

As far as risks go – I think our biggest risk is of losing focus on what we do best – serving readers with highly interesting, relevant links to other stories. As a startup it is very easy to get tempted with “opportunities” and spend lots of resources on things that seem important for the company for a moment, but don’t really matter to the customer. That is the silent killer of most startups. We put a lot of effort to remind everyone on our team that we have to focus on providing our bloggers a great widget and terrific customer support, and provide the readers with great links. Losing that focus is likely our #1 risk.

Thanks.

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