Amazon, Boasting New Sales Office, Sniffs Around Israeli High-tech

The retailer, which is considering acquisitions, is the latest U.S. giant to sell its services to Israeli tech upstarts.

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In addition to fast exits by small startups, Israel has produced plenty of global Internet companies. No, not a Facebook or Twitter, but firms that rack up revenues and employ dozens and sometimes hundreds of people.

Increasingly, high-tech giants realize that it pays to set up shop in Israel and ply their services to these upstarts, which have their own global reach. Among the latest to join the fray is Amazon, which recently opened a representative office.

Israel’s home-grown high-tech base includes eToro, a social investment network; MyHeritage, a genealogy and family-oriented social network; Matomy Media Group, a digital and mobile advertising firm; and IronSource, an online software distribution firm.

Some of these outfits may be ready to be snapped up by a buyer, but most see themselves as independent companies for the longer haul. They want to make a mark on the Internet from their Israeli base.

And firms like these have made Israel an attractive place for Internet giants seeking to sell their wares. Microsoft and Google have been in Israel for years in that capacity, before Facebook and Amazon’s recent entry.

Amazon isn’t only the largest Web retailer in the world, it’s the largest supplier of cloud computing services — through its Amazon Web Services division. It’s now seeking to sell those services to companies in Israel.

“If you go to [Tel Aviv’s] Rothschild Boulevard and circulate among the Israeli startups, you’ll see a large portion of our customers,” said Harel Ifhar, who heads Amazon Web Services in Israel.

Up to now, Israeli companies could avail themselves of Amazon’s Luxembourg office, but the new presence is expected to improve the level of service. And Israeli firms provide their own insights to Amazon, Ifhar said.

“We see so much innovation [in Israel] in [data] storage, big data analysis and life sciences,” he said. "Among technology centers around the world, I think Israel is one of the hottest places at the moment. It’s clear that we’re looking at companies here, but we can’t comment beyond that.”

Amazon is a rarity among global high-tech giants: It hasn’t acquired a company in Israel. At the Mobile World Congress in Barcelona in February, Amazon officials met with executives of Israeli data-storage startups, but based on its track record, Amazon appears more interested in acquiring retail and logistic companies than technology firms.