Tech Roundup / Cat Fight in Cellular: Lies, Damned Lies and Ministers Who Hit Back

Cloud-company Wix scores $127 million; Bezeq posts great results, mostly; big-data maritime analytics company raises $5 million.

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Cat-fight in communications: "If you repeat a lie three times it becomes true," former communications minister Moshe Kahlon swiped on Tuesday at Ilan Ben-Dov, who'd lost much moolah during the few years he owned Partner Communications. Why did Kahlon do that? Ben-Dov told the Globes business newspaper that the "Kahlon reform is a bluff," and further claimed that "a thousand people lost their jobs directly because of Kahlon." He is the minister who opened the mobile industry to competition, by the way, causing prices to drop by as much as 90% and badly hurting profits at the three veteran operators, including Partner. And who snorted back that Ben-Dov had his numbers wrong and anyway, not a few of the firees had been hired by the newly formed, low-cost and sharp-fanged new companies.

See the cloud. See the investment: On Wednesday Israeli cloud-platform startup Wix raised $127 million from American investors, raising money at a company value of $760 million. What can you do with Wix's cloud-based platform, aside from seeing things in it? Use it to build a website without knowledge of programming or web design. What does the cloud have to do with that? Well, it  is the latest buzzword isn't it. You can also buy premium site-operation services from Wix, which by the way is losing money, as it admits in its prospectus.

Bezeq happily reported powerful results for the third quarter of 2013 on Thursday, posting a 31% jump in profit to NIS 449 million ($127 million) – even though revenues slipped 3% to NIS 2.4 billion. Why? Because the phone company's income from mobile communications was gutted by deep-discount rivals. So it goes when competition raises its hairy head. Pelephone, its cellular subsidiary, admitted to a 5.5% shrinkage in its user base and a 9% drop in profit to NIS 140 million. Note the word profit – for all the wailing about those competitors with their "lousy quality," it's still in the black.

Speaking of the former national phone company, the antitrust commissioner has announced his terms for Bezeq to merge with the cable-TV provider Yes. There are various restrictions regarding the sale of infrastructure to rival companies and restrictions regarding exclusive rights (or the ban on) to content; the two companies are expected to groan but agree. Their merger would be purely financial (Bezeq could consolidate with Yes); for one thing, Yes expects to be able to lower its costs of financing.

Windward raises $5 million: For its first investment, the Aleph venture fund has chosen Windward, which develops technology to analyze the movement of vessels at sea. Windward means to use the money to double its staff to 50. The maritime analytics company was founded three years ago by former Navy types. And what is its technology good for? For instance, to notice suspicious cargo transfers at sea, illegal fishing, arms smuggling, that sort of nasty stuff, and also assess future risk. Its tech is based on, first and foremost, analysis of big data – enormous rogue-wave-high waves of data coming in from satellites and other sources, which get crunched by the company's algorithms. " The sheer vastness of the seas leaves the maritime domain today as the last ungoverned domain on the planet," the company romantically lilts on its site, where Roundup was trawling for its clientele.

A sobering statistic: A lot of people think their little snowflake can build a startup and sell it for multiple millions. The snowflakes are pretty optimistic too. But how realistic are they being? Not very, according to a study revealed by The Cowboy Ventures and Tech Crunch: Companies that achieve a billion-dollar value are extremely rare. How rare? In the last ten years just 0.07% of American technology startups reached that status, they say. And by the way, these incredibly rare cos ("unicorns") aren't usually founded by kids, uber-unicorn Facebook being the exception.

Nexus 5 arrives: Israelis, long enured to being late to get new technology, are getting the Nexus 5 smartphone with the rest of the planet. The phone, Google's answer to Apple's iPhone, will go for NIS 2,800 a pop (around $800); for comparison, the Galaxy S5 costs NIS 3,600 (around $1,030). Now, in the States the Nexus 5 costs $349. Why do Israelis have to pay so much? Customs, VAT (18%), import costs, sales tax, and warranty, says Guy de Picciotto, CEO of the import company Ronlight. He says he pays more for the phone wholesale than it costs retail in the States. Now you know.

With reporting by Amitai Ziv and Inbal Orpaz

Wix headquarters in Tel Aviv, Israel.Credit: Moti Milrod
A happier time: Moshe Kahlon, then communications minister (left), shakes hands with Ilan Ben-Dov, businessman (2010).Credit: Moti Kimche

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