Lots of stuff going on — let’s jump right in. Also, for those who didn’t know, we’ve launched our own new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com.

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Two Birthday Stocks (instead of jewelry)

Aaron Katsman has two good stocks that make better birthday presents than jewelry. Don’t tell my wife!

Incredimail gets dumped by Google
Katsman also has the scoop on Israeli Internet stock, Incredimail (Nasdaq: MAIL), and its Web 2.0 travails with Google.

Teva N. America President hops to Cardinal Health

George Barrett, chief executive of Teva North America (Nasdaq: TEVA), has resigned and will be replaced by William Marth.

Electronics for Imaging Drops

Electronics for Imaging (Nasdaq: EFII), the maker of digital printers and inks, fell the most in more than seven years in New York trading after the company reported preliminary fourth-quarter sales that missed analysts’ estimates.

Amdocs with AT&T win

Amdocs (NYSE: DOX) with a nice win at AT&T (NYSE: T).  It was a good 48 hours for Amdocs.

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NEW! This interview, in its entirety, was published for the subscribers of Israel Opportunity Investor, our new subscription product providing investors with the best ideas in Israeli stocks trading in the U.S. To subscribe, or receive a sample issue and our recently published white paper, go to www.israelnewsletter.com

Tell us about your company.

Yaron Adler, Founder and CEO: Incredimail (Nasdaq: MAIL) is an Israeli company, founded in late 1999. Incredimail is our flagship product for email. The product allows users to customize and personalize traditional email communication, in a way that brings life and excitement to applications they regularly use. We enable you to send emails with 3D effects, funny animations and customized backgrounds. We aren’t re-inventing the wheel. We take existing applications, like email, and make them fun to use.

Giving away free content is not a great business. What’s the business model?

YA: The business model is based on what I like to call “the large numbers game.” We are working hard on two fronts: we are working to bring millions of new users to our products and working on how to best monetize them. We started by using viral marketing to promote our content. Every email sent from Incredimail has a link included on the bottom to bring the recipient of that email to our website. This strategy has worked very well. To date we have 80 million users of which 11 million are active (defined as at least 1 usage event per quarter). Over 300 million emails are sent per month with Incredimail. We get 300,000 new visits to our website daily just from the viral links we include in our emails.

How are your revenues?

YA: For the first nine months of 2007 revenues increased 94% to $13.3 million from $6.9 million for the first nine months of 2006. Net income for the nine-month period was $1.8 million versus $1.6 million for the same period in ’06. Again, we’re focused on two things: accelerating growth to get more users plus trying to better monetize our users. To do this, we need increased R&D to make new products for our users to interact with and we need to improve our revenue sources.

You’ve said search revenues are going to play a bigger role in your revenue model. Can you explain how?

YA: You can grow search revenues in two ways: more searches + more profitable searches. We’re just in the early stages of doing this. We’re directing searches to our search engine (powered by Google) by suggesting to our users to replace their homepage with MyStart page with value added Incredimail content. A soon-to-be-released browser toolbar increases searches away from Incredimail. We can find a way to promote suggested searches and ultimately, as our search traffic increases, negotiate a better deal with Google.

We’ve just started optimizing our search revenues. Our growth continues to accelerate, driven by increased revenues from all streams: products and subscriptions on the one hand, which used to be our big revenue driver, and advertising and search on the other hand, which now accounts for almost 46% of our revenue.

How are your content deals with movie studios coming along?

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It’s been a wild and woolly week for stocks in general and even more so for Israeli companies. We’ve seen some disappointing earnings across a broad swath of stocks and even the mighty have felt some pressure.

Let’s start with Alvarion (ALVR). Even after the Cisco purchase of WiMax competitor, Navini, the stock has had a hard go of it and even received a downgrade by Merriman, Curhan, et al. IsraelNewsletter’s Katsman, though, is still very positive on the name. Read his recent post here. Before Cisco (CSCO) officially announced its takeover of Navini, I posited that it would be better served by buying ALVR. Read that article here.

Commtouch (CTCH) out with numbers.

Radvision (RVSN) stinks up the joint. Even my colleague, Aaron “Buy Everything” Katsman has lost faith in the firm. See his recent capitulation here.

Magal (MAGS) Systems gets an order.

RRSat (RRST) reported last week.

Partner (PTNR) sees a lift from rising revenues.

Answers.com (ANSW) reports really strong traffic growth in its new WikiAnswers product.

Laggard BigBand Networks (BBND) terminates its CMTS business. I wrote on BloggingStocks about the future of cable TV and how BBND plays into the thesis.

ClickSoftware (CKSW) traded down big after reporting OK earnings. Read why Katsman smells an opportunity in this name.

Microcap Cimatron (CIMT) out with earnings and some info about its plans for China.  Read some excerpts from the conference call.

012 Smile.Communications (SMLC) floated this week.  I posted on the offering here.

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