Onavo Acquisition Could Be Just the Start for Facebook in Israel

This isn't just another exit; Onavo to be FB's first R&D center in Israel.

Facebook's acquisition of mobile data-saving app creator Onavo is not just your typical hi-tech exit, whose prime beneficiaries are the bank accounts of a small number of talented entrepreneurs.

Facebook will be using Onavo’s staff as the foundation for its first-ever research and development center in Israel, a move that promises to have the same long-term impact on the local hi-tech scene as when Apple bought Anobit Technologies at the end of 2011, creating an Israeli toehold for what many regard as the world’s greatest tech company.

While it may be a relatively young company, Facebook’s reputation as a source of global innovation is almost as strong as Apple’s. Alongside Google, Facebook has created a giant world of content that sucks in web-surfers' times and advertisers' money. The trend is just emerging and, as things currently stand, few doubt that Facebook will be among those leading the charge into the new era - one of the four horsemen of the app-ocalypse, driving change and creating disruption across the digital world (the other three being Google, Apple and Amazon).

In recent years, Facebook executives have been in intensive contact with people in Israel’s innovation sphere, and visit often. In contrast to Apple - which took several years to appreciate the value of Israeli innovation - Facebook very quickly understood Israel’s capabilities. Until the Onavo acquisition, only two of the horsemen (Apple and Google) had significant R&D operations in Israel. Now there are three.

Facebook's decision to leave Onavo's Israeli staff in place here was not a simple decision for a company that prefers to concentrate its developer resources at its Palo Alto campus. Facebook’s two previous Israeli acquisitions - the mobile app platform Snaptu in 2011, and facial-recognition company Face.com in 2012 - was followed by a sharp drop in staff at both companies and consolidating their teams in its headquarters.

The substantial presence in Israel of the world’s top technology companies, the ones that are leading the digital revolution, points yet again to strong qualities Israel offers to hi-tech companies. It also ensures a more stable and deeper job market, since, unlike the startup companies that typify the local tech scene, these multinational giants are not likely to disappear anytime soon. What these companies rarely do is generate large numbers of jobs in Israel.

However, Israel may interest Facebook above and beyond acting as a software-development center. Like Google, Facebook's main business is selling advertising space, and that is where it creates the most employment and opportunities. Google has expanded its Israeli operations beyond development to give it responsibility for business operations in Turkey, Greece and Africa. This has created work opportunities not only for engineers and other technology geeks, but for those in sales and business development, widening Google’s impact on the Israeli economy and labor market.

We can only hope that Facebook similarly puts its faith in the Israeli talent and locates some of its regional business operations here, as well, not just its R&D work.

Reuters