Insights, not posts

Facebook has been making waves in the investment community with it’s massive success in mobile ad revenues. And they are just getting started. According to eMarkter, Facebook’s mobile ad revenue will top $2 billion in 2013, an increase of more than 300% from the less than half a billion dollars earned in 2012.

Unsurprisingly, Mobile developers and marketers were way ahead of Wall Street on this one, and it’s pretty much the biggest secret that everybody knows about right now.
Earlier in 2013, developers started playing with the Facebook mobile app install tools, experimenting with the different options. in the last week of Q1, 40% of the top 100 iOS and Android app developers bought Install ads.

Very quickly, it become clear to mobile acquisition experts that the pendulum in mobile app installs ads has shifted from ad networks to Facebook’s platform. I’ve talked to several marketers and growth professional, mostly in mobile gaming (where a lion’s share of the spending is happening today), and they are all basically saying the same thing – Facebook has the best ROI in the market right now. Most of them are spending at least 50% of our budget on Facebook, and some spend much more.

So why is Facebook is winning in mobile app installs?

First and all, the ad-unit itself seems to work well. The bigger picture in the ad does a good job, and the way the ad unit is integrated into the Newsfeed is effective. With current inventory fill rates, it seems that most users get one or two ads as they scroll through their mobile Newsfeed. That seems like an acceptable ad saturation rate for most users, resulting in less ad fatigue and better conversion rates for advertisers.

More importantly, Facebook has been able to do much more with targeting than most mobile ad networks out there have been able to do so far. Mobile Ad networks are facing  technical barriers, driven by the constraints of the iOS and Android platform. With lack of robust tracking tools across apps, like pixels on the web, It’s difficult for ad networks to track users across apps and gather all the data they need. This results in smaller buckets of available targeted audience. For example, if a marketer is looking for a demographic of woman aged 34-45 interested in event planning, ad networks might provide some or all of the demographics and interest based targeting, but it’s virtually impossible to find an ad network that can deliver the ad to a significant audience scale like Facebook does.

Facebook has also rounded up the it’s mobile ad platform with a number of goodies. One robust capability is the “Look a like audience” feature, which is basically a shortcut to leverage 1st party proprietary data. It enables a marketer to target ads to users who have “Look a like” interests compared to the Facebook fan page userbase. It also allows marketers to retarget customers in the app through contact information, such as email addresses and phone numbers. This is a breakthrough for many marketers who have troves of data,  but are having difficulties leveraging the data to have better targeting.

All this stuff adds up to a substantial advantage driving real value for app developers. Is this advantage sustainable?

For mobile Ad Networks it might be challenging to build an audience as wide and deep as Facebook has, without getting more flexibility from the platforms with tracking and data. Many marketers speculate that this might not happen on iOS at all (Apple seems to be taking the opposite route by tightening control over user data and removing UDID). Some think that there might be more flexibility on Google’s Android platform, but it remains an open question.

Google probably has its sight on the app install ad spending, and could use the Android platform data to build similar capabilities and go direct to market. With Facebook’s success, it’s almost eminent in my mind. It makes sense for Google to try to play the Mobile app install game – both on Google+ and through other mobile properties, as well as power other types of ads across Android apps.  Apple with iAd is trying to do the same, but up until now Cupertino has not shown marketers that the ad platform is effective, and they need to up it’s game to get there.

All in all, it seems that Facebook has a winner for the short term, and maybe also for the long term.

LinkedIn is one interesting “Social” network, and their new content strategy makes a lot of sense to me. Here is why.

Even though LinkedIn is not as viral as Facebook or Twitter, it has proven to monetize well ($8 annually per monthly user compared to Facebook’s $1.5). The higher revenue per active user opens the door to exploring new types of business strategies, including one that you might not expect a social network to go after – a content strategy. To clarify, this is not about LinkedIn buying paid content or distributing paid articles about how awesome LinkedIn is. It’s actually a strategy targeted right at heart of one of LinkedIn’s biggest challenges – increasing engagement.

Backing out a bit to restate the obvious, every freemium product needs to first nail acquisition, then engagement, and finally monetization. Each requirement is not standalone, acquisition is a pre-request for engagement, and without an engaged userbase it becomes extremely hard to drive meaningful revenues.

In it’s infancy, back in 2002-2004, LinkedIn was actually slow to grow and it took quite a few years to ramp-up user acquisition (One reason might be that LinkedIn was just early to the market and people could not see the value until the network effect was fully in place). A few years later and with a few great tricks up their sleeves (including rumored Reid Huffman’s “loss aversion” invite acceptance tactics) they finally got there.

In the meanwhile, building on one segment of super active users – recruiters, LinkedIn was able to launch money making products - Talent solutions (The companies cash cow accounting for ~50% of revenue), Advertising (~25% of revenue) and later premium subscriptions.

So LinkedIn has figured the first step – user acquisition (including activation and network effect) and then jumped directly to the step 3 – monetization. Meanwhile, engagement was doing well, but not as great as some of the other metrics compared to other “Social” networks. It all makes perfect sense. The long tail of LinkedIn users were not really using the product daily. Unlike Facebook, the action on LinkedIn is not as compelling for most people. Users don’t come to LinkedIn to check-up on their friends, they come to find their next big gig.

Circling back to content strategies, comes 2013 and suddenly LinkedIn is all about content. They started with the launch of the Influencer product and pushed it hard with massive email campaigns to users and front page promotion. More recently they bought Pulse to help target the best content for users.  What’s interesting about this is that it’s sort of opposite to anything else that is happening out there. Content businesses online are actually facing more challenges than ever – banner ads, the bread and butter for many businesses are becoming less and less effective (just look at Yahoo’s latest earning reports). Content players are finding it increasingly hard to drive revenues for their work and are becoming less sexy as a business.
Actually, the acquisition of Pulse itself is a good indication of the challenges content companies and content related technologies are facing. Pulse is reported to have more than 30 million active monthly users, which is big by any standard and especially so in mobile with challenges around retention. However, Pulse was bought for $90m - That’s $3 per active monthly user – Meanwhile LinkedIn has ~150 million active users each month but is worth over $19b, that is no less then $126 per active monthly user.

Then why is LinkedIn suddenly focus on content? well… LinkedIn has found a way to flip this model on it’s head. With great monetization it suddenly makes a lot of sense to engage users by leveraging content.  Think about it for a second – LinkedIn has the audience and knows how to make money out of it. Additionally, LinkedIn has a strong ad-based product. The equation in the ad business is actually really simple – more pageviews = more revenue, and that is exactly the low hanging fruit that LinkedIn is after.

The content challenge for LinkedIn to make their product one that is used daily and becomes part of a “ritual”, resulting is sustained engagement. If users get used to reading high quality news at LinkedIn the engagement challenge is essentially solved, driving ad revenue up first, but even more important for the longer term, fueling growth across all products.

For a couple of years now people have been fascinated by Social Networks and how they have impacted our lives. We have seen social networks raise to become some of the most prominent tech companies of our times – Facebook, LinkedIn and Twitter. When you think about it, it makes sense – People want to share, like and interact with others. Social Networks are the natural evolution of online interaction.

However, not all Networks were created equal, and they are not all “Social”. More broadly, in our lives there are three distinct networks that really matter – Social, professional and family (not necessarily in that order). The Social Networks, which can be divided to sub-networks (i.e. friends from college, friends from back home, etc.) was conquered by Facebook. The professional network, the digital extension of one’s rolodex, has been conquered by LinkedIn. The last big network that really matters is the family network.

The social Network builds-up on basic social behavioral needs – Sharing an exciting moment in your life, Peeking at a profile of a potential blind-date, and social conformity (You better like that wedding photo, or else…). Social Networks is where you go when you want to catch-up with your friends and see whats-up. Google+ is trying to rebuild the social network graph, and with the amazing tech machines called Google behind it, it’s bound to have an impact. A lingering question still remains – does the social graph need rebuilding?.

The professional network is quite different. it’s social to the extent that people use it to communicate, but what drives the interaction is very different. It’s not about sharing a moment, it’s more about reaching a goal – Getting an introduction, finding your next exciting position, or poaching a key employee from a competitor. It’s business oriented and driven by a different set of wants and needs, which are not really “social”.

The Family Network is different then anything that came before it, and is even less “social”. Think about how families interact and what they do – families sit down for dinner 7pm, they ask “where are you? when will you be here?”, and they share their lives in different, more intimate, way.
That is exactly why the family network requires a completely different approach. it’s about a private network – not about shouting out to million of fans on Twitter, It’s about staying in sync – not about liking a cool filtered picture, and it’s about people you communicate with daily – not about a random friend you met 10 years ago at a party and can’t even remember why you like.

One big network has been left on the sidelines. Time is ripe for that to change.

Credit for most (if not all) of the inspiration for this post goes to Chris Hulls, CEO at Life360.

Back in 2010, Mark Zuckerberg went on stage and told TechCrunch’s Michael Arrington that the age of Internet privacy was over and hinted that we should get over it.

2 year later, web privacy is officially dead and every other thing we do is posted online on Facebook, Twitter and Instagram. Major and minor details of our lives are being broadcasted openly to hundreds of friends, family, and random people we last met 10 years ago, befriended on Facebook, and have not yet deleted because of some obscure reason.
Then, as some of those posts get shared with friend of friends and their friends, we can wake up on day just to find out that the embarrassing picture you posted, by mistake, via Facebook’s automatic iPhone sync, is viral and trending with teenagers in Estonia.

This is just the beginning. As humanity takes the next step toward a world where everything is digitally documented in real time, geo-privacy is next. And it’s dying. Quickly.

However, location sharing is a bit different. Location sharing requires refined controls about who you share your location with and for how long. Several companies are already seriously hacking into this and are making significant progress (full disclosure: Life360, the company I work for, is one of them). Those companies are taking the friction out of location sharing. However, they are doing much more then that – they are making the advantages of making your location public seriously outweigh the disadvantages.

I believe we are approaching a tipping point. This one is a bit harder for adults to grasp, but kids are all over it. They understand it’s the future. A 12 year old that just got his first smartphone will grow up in a world where location sharing is a must – finding where your friends are, hauling a cab to your location, checking-in with your mom so you don’t get that “Are you okay?” embarrassing call in front of all your friends, getting that special discount at Starbucks when you check-in. The list of use cases just keeps getting bigger everyday and some of them are killer features.

It might take a little bit more time (as with any technology that needs to leap past the early adopter phase into the mainstream), but eventually we will live in a world where it just doesn’t make sense to not share your location. Ten years ago, if somebody told you that your parents will shout at you for not posting recent pictures of your baby boy on Facebook, you might have dismissively laughed at them. Less than ten years from now, don’t be surprised if other people will just know where you are, whether you like it or not.

Geo-privacy is dying, we just need to get over it.

In late 2010 I wrote a blog post about how Facebook could easily be worth $100B. Some of my colleagues called me up and did nothing short but claim that I must be crazy. That’s perfectly fine. I have a feeling that I’m going to get even more calls about this post. My rationale isn’t built up from an analyst’s financial model or from leveraging traditional market sizing techniques, it’s mostly based on intuition about how Facebook can become the key player in the world of Online marketing and advertising.

Google is the leader in performance and direct response advertising, converting users wants and needs to e-commerce transactions and sales leads. Facebook competes with Google on direct response and is becoming more and more effective in doing so by leveraging the Social and user’s click-stream data, capturing a growing portion of Google’s market.

However, Facebook’s untapped potential is actually in brand advertising, a space that currently has no clear winner and will account for almost half of total online advertising spending in 2015, according to e-marketer.

Brands already get it and are willing to pay; But Facebook hasn’t yet found the right model to fully incorporate them. The value of positive engagements between consumers and brands shared across the social space is hard to match, and Facebook will find ways to scale the monetization of that on facebook.com across fan pages, ads and the newsfeed.

Analysts focus on revenues from ads delivered on Facebook.com, and Facebook has just started maximizing its potential there, but Facebook has not yet turned to monetize one of its greatest assets – the Open Graph.
Hundreds of millions of users are using Facebook’s open graph capabilities across million of websites (including most of the top sites in the world). More than 10,000 sites are adding the Open Graph capabilities each month. “Login with Facebook” is no longer an option – it’s a must.
Additionally, Facebook captures endless piles of data about people, their lives, and their friends. Think a lifetime worth of data and then multiple that by over 800 million users. Big Data indeed. This staggering amount of data will enable Facebook to deliver ad targeting capabilities which are unparalleled, optimizing performance and accuracy better than any marketing tool seen before. Whether this happens or not depends mostly on execution, not on the conceptual capability to deliver those tools. The data is there.

This all leads to Facebook having a unique opportunity to create an unparalleled display ad network outside of Facebook, adding social targeting to help drive up revenues. With this strategy, there is no reason why Facebook can’t control the same portion of the market in online branding as Google does with direct response. Facebook can eventually match Google ad revenues with a combination of brand and direct response ad products, inside Facebook.com and in many leading destination sites outside of Facebook. With other revenue streams, such as payments for virtual goods, Facebook can even outpace Google.

Compared to Google, Facebook’s business is potentially more defendable. In Search, Google dominance is driven by excellence in monetization, a powerful brand and great technology. However, Google does not “own” search, it just executes better than anybody else in the search world. as technology progresses Google’s tech advantage is becoming more incremental compared to some of its competitors, and can be potentially disrupted. It’s going to be crazy hard to disrupt Google, but it’s doable.

Facebook is not in the same boat. Social is already an inherent, must-have, layer in everything online – websites, mobile apps and smart TVs. Facebook “owns” Social, and in its dominance is driven by a powerful network affect. Technology is not the key driver here. Many can potentially try to create a social network service that outperforms or delivers more features than Facebook does, but it doesn’t really matter. What matters is that all your friends are on Facebook.
At this point in time, Disrupting Facebook requires more than a just better tech or flawless execution. It requires a paradigm shift to a whole new era of online computing, and even there it’s pretty safe to assume that Facebook will be all over the place.

So, whether it takes 12 month or 5 years, it’s pretty much inevitable – Facebook, as mission critical piece of our connected identity stack, will increasingly find ways to monetize its position and would be worth more than Google today at $200B.

This post is a guest post – an open letter to Facebook – written by a good friend, Guy Azar (http://il.linkedin.com/in/guyazar). Guy has been working hard to build a business on top of Facebook, helping brands promote themselves on the platform.

Facebook significant changes to fan page platform, soon to take full effect on March 30, literally made the fan page as commercially effective as a personal profile. Many existing connection, engagement tools and techniques have become obsolete as a result. Most providers will take weeks to months to restore the usability of their products & services, and achieve partial effectiveness, at best, in continuing to promote their brands and customers.
This excludes, off course, the inner circle of providers such as Buddy media, Involver and others who were in on the hot details well in advance, just enough to be ready on time.

This is the classic move of the platform player: every once in a while making a few smart changes, which gradually snuff out revenues from the echo-system and further empowering platform revenues. Day by day this is causing fan page developers to clearly understand that we will never be able to build a big business on top of Facebook in the long run. Once our business is big enough, the platform will make changes, leaving us, the echo systems inhabitants, with just enough revenue to keep going.

One could say that this change shows how Facebook is facing the final countdown on earnings / IPO move. In fact, Facebook is probably desperate enough for short term profits that they are willing to make long term sacrifices on account of all the providers who leverage the platform. They are hurting the same echo system they were so smart to build in the first place, with their open APIs, available information, and overall pro-developers approach

Facebook knows that the true long term goals are beyond connecting a brand to a person. They wish to function as the main personal history and ID source for each and every one of us. This is their long term goal and its implications are beyond Economical. The vision they will only be realized by fiercely defending user privacy and provisioning commercial actions.
They are life changing, and the vast economical sides effects of this future are more than beneficial.

But the long path is jeweled with many financial challenges. Social media value is proven for corporations, mainly in Marketing: branding, accelerated buzz \ WOM generation, lead generation, customer relations and support, engagement, satisfaction, churn indicators, all decreasing CPA or increasing LTV in some way or another.

However, it seems as if the social media monetizable values are NOT clear for the social media platform itself.
Facebook latest move is, from my point of view, a BIG signal to developers. A big question mark. That question should be reflected back at Facebook – “What is our business model with brands?” and it’s derived from the more basic question mentioned above: “what function in people’s lives does Facebook fulfill?” and “what commercial aspects of people’s lives do we intend to facilitate?”. Facebook should moderate every commercial act over its platform, But they can contribute to the creation of the ethical, legal, foundations of it, shifting some responsibility back to the Brands & businesses. Once it is acknowledged culturally and legally that brands and businesses are responsible for their use of their user’s personal information.

So what will it be? Why can’t Facebook charge businesses for their commercial presence and activity? Facebook has the means to measure the connection, engagement and actions users perform with brands and businesses. With so many valid indicators, why can’t those indicators serve as the pricing and business model for brands and businesses on Facebook?
it makes sense – presence itself could to be billed for. With that model Facebook will be better aligned with it’s developres echo system, effective leveling the playfield by letting any developer share revenues with Facebook when their bring brands that engage with users on Facebook.

To summarize, as a fan page builder I am very disappointed with Facebook. letting the providers take the fall for their monetizing challenges. Instead they could come up with a vision in which presence, connection, and engagement indicators will function as billing meters. That could provide us the liberty to go back to the work with relevant customers who are interested in engaging users at a brand’s fan page, deliver a special customer experience, exclusive information, opportunities and offers, and share them with the brand and with fellow customers.

Yours,
Another ex-fan page builder.

Social Gambling (i.e. Zynga Texas-Holdem Poker, the world’s largest poker site of any kind) has been around for years now with virtual currency, but only recently has the media picked-up this theme and started playing around with it, drawing parallels to social gaming, and suggesting the Zynga might actually switch to real currency.

Investors and corporates, however, have been going back and forth with this for a while now and a few recent acquisitions in this space include Playtika and Double Down Interactive.
Harrah’s, a unit of Caesar’s Entertainment Corporation, acquired 51% of social games developer Playtika Ltd. at a company value of $90 million. This acquisition is astonishing by almost every measure, as it is the largest acquisition of an Israeli online gaming company, and for a company that has been around for less than a year(!). Meanwhile, Double Down Interactive, creator of multi-game app Double Down Casino, was just bought by International Game Technologies in a deal worth up to $500 million.

The potential in Social Gambling should come as no surprise to anyone.
Gambling is inherently social (think about any casino game, other than maybe slot machines), and social gaming (i.e. Farmville) has much in common with gambling.
One very good example of how close social gaming is to gambling, and how it basically triggers the same kind of brain reaction, was recently posted here.
See if this sounds familiar to you: To play, you put currency into the game. You then pull the knob and wait for the result. When the result is presented, you are rewarded with a cacophony of exciting sounds, attention-grabbing images, and some form of currency. You also have the opportunity with each play to win a rare prize of significantly higher value than the value of the currency you contributed to play the game.
That sounds a lot like a slot machine, right? Wrong. It’s the basic action loop in FarmVille.
Here is the same description again, but this time, with FarmVille specific details: To plant a crop, you must first spend resources on the seeds. You then plant the seeds and must wait for them to grow. When you harvest the seeds, you are rewarded with a cacophony of exciting sounds, attention-grabbing images, and some resources. You also have the opportunity with each play to win a rare prize of significantly higher value than the seeds that you purchased.

Couple that with the distribution channels available in Facebook and other Social Networks and here comes “Online Social Gambling”. Many online gambling sites have been dying to leverage the social customer acquisition channels for ages now, but have been barred by Facebook’s reluctance to approve gambling content, to avoid legal complication in the US. Those companies are more than willing to pour billions of dollars into customer acquisition in Facebook, just because they knew that they will optimize those acquisition channels to reach a rock-bottom customer acquisition cost. Social will also help drive stickiness and time spent, increasing the customer’s life-time-value in the game.

With the new Obama administration ruling that opens the door for states to allow some online gambling we are bound to see a slew of companies move aggressively into this space. Some of the more obvious candidates include PartyGaming.com, traded on the London Stock Exchange; Betfair, and other operators, like Bodog, Bet365 and 888.com. After all, there are billion of dollars to be made in this business…

Facebook’s recent product releases in F8 are potentially disruptive on multiple fronts and very exciting. My plan is to write a few short posts about the changes, and this first post is mostly about Timeline.

Facebook’s strategy
Almost all of the changes announced reinforce Facebook’s strategy on increasing engagement, collecting more personal data, and extending the Open Graph platform outside Facebook. All of those changes will potentially enable Facebook to charge more advertising dollars in the future for letting brands access the Facebook user base.

This latest release also marks Facebook’s entry into new spaces beyond games, mostly entertainment related (music, video). Getting more users is no longer an issue for Facebook, it’s all about how to increase user level of engagement and own all the private and social data out there. Facebook has been doing a very good job so far:

Facebook’s Timeline
This one is a mix between 1000 memories and Myspace on steroids (especially with Facebook boxes back). Polishing profiles is a natural and irresistible behavior and back in the days Myspace (unintentionally) created an entire eco-system of profile enhancement, widgets and layouts around Myspace which drove a substantial part of the engagement there.

Funny that it took Facebook sometime to realize why Myspace worked (until it stopped working…) – because people were busy grooming their profiles. A friend from Facebook mentioned that user activity analysis showed that peeking into profiles (Did anybody say stalking?) and tweaking one’s own profile are key user behaviors, so Facebook decided to further develop that.

Stay tuned for additional vignettes on some of the other interesting features.

This week Google has made a bunch of Silicon Valley folks happy with the launch of Google+ and a slew of additional social and communication features (Huddle, Hangout and Sparks). It seems like the Social Network “war” is officially back on, and remarkable this is happening exactly on the same week that Facebook’s old Nemesis, Myspace, is finally put to rest.

From a user experience perspective it seems that Google’s product is getting positive feedback. I personally like it and think that circles is just fun to play with and that the main Google stream component has a good clean user interface.
The successful launch and Google’s reach across different products will surely help Google+ acquire users, but the real questions is not whether they will come if Google builds it, it’s whether they will stick around.
The attention span of users is limited and people use both Facebook and twitter because they provide two pretty different communication channels. Google+, however, is just too similar to Facebook, so it can either steal that attention span from Facebook or bust.

With user retention it seems that Vic Gundotra and Bradley Horowitz are right on the spot – it all comes down to how broken and awkward online sharing is, but for me there is one question that just keeps lingering out there – do people really care about that anymore?
Facebook, with over 750 million users, has done an amazing job educating the masses that privacy is dead and surprisingly enough, it’s working. If privacy is really dead, do we really need walls between our friends and peers at work anymore?
Do young professionals really care if their boss sees their pictures from last night when they were wasted? Maybe not so much – relationship both on the professional setting and on the personal level are getting more informal.
Does a college undergrad care that his mother knows he was out all night with a random girl? yeah well, mom choose to befriend him on Facebook so that will teach good old mom a lesson.

Talking to a few startups this week that are focused on professional social networks and data analytic on top of Facebook, it seems that the Facebook environment is increasingly becoming a professional communication channel.
The thin line between a professional and personal networks is becoming increasingly thinner and people are grouping their personal and business connections together. One startup, FellowUp, a personal productivity tool that taps into social accounts, reports that its users (mostly professionals) are connecting to their Facebook account 50% more often than to their LinkedIn accounts, and are leveraging the Facebook connection to reach-out their peers and counterparts at work alongside their friends.

With a good product out there, it remains to be seen whether Google is able to change users’ habits and make them switch to Google+, because people think that Social sharing on Facebook is broken and would rather share content on Google+ instead. It’s one philosophy vs. the other and may the best one win. Or at least that is the case on the web browsing front.

But what about mobile? Facebook faces one additional risk from Google in the Mobile Social Networking space – Google has that mobile DNA with Android and can build on top of that. For example, what would happen if Google preloads Google+ into Android devices? Facebook probably needs to get more serious about mobile, and fast.

The fact that there is currently a sizable gap in the Israeli VC market is not new, but lately it seems that the situation is slowly improving. Also, US based venture firms have noticed this market gap and are making a move to benefit from it.

A quick recap of the he Israeli VC industry history shows that 2010 has been the most difficult year for Israeli VC funds since it’s inception in 1992. Despite improvement in macro economical factors in 2010, Israeli VC funds were not able to attract new capital during 2010 (Yes, that’s right, they have raised $0). 2009 wasn’t that good either, with only $234 million raised by Israeli VC funds and $200 million of that amount raised by just one fund – Sequoia Israel.
Local Funds still hold approx. $1.2B and are able to continue investing in 2011. Accordingly, Hi-Tech investment in Q1 2011 have gone up by over 100% compared to Q1 2010, with 140 Israeli high-tech companies raising $479 million from venture investors, both from local (69%) and foreign firms (31%).
However, the future doesn’t look as promising and the ability of Israeli VC firms to raise follow-on funds in 2011 and 2012 will have a strong impact on the future of Israel’s high-tech sector.

Meanwhile, a few US firms are moving to close the market gap. This week, two firms have expanded their Israeli activity – Innovation Endeavors and Greylock Capital.
Eric Schmidt’s innovation endeavors, Founded a year ago, does not manage a predetermined amount of capital, but locates and invests in early-stage start-ups. Innovation endeavors appointed Doron Alter to head its local team and the fund’s managing partner, Dror Berman, will closely supervise the Israeli operations.
Greylock Capital has just announced a new $160 million fund aimed at internet technology companies, deployed between Europe and Israel. This is Greylock Capital’s second fund, with he first one investing in Israel since 2006.

With new and improved dynamics in the US IPO market and Israeli internet startup firms such as Conduit and Wix doing well the IVC’s (Israeli Venture Capital research center) outlook for capital raising is cautiously optimistic. Furthermore, Israel’s Ministry of Finance has recently announced an incentive program for Israeli Limited Partners to invest in Israeli funds and the program is expected to increase investment by $220 million in 2011-2012.
Hopefully the improved dynamic coupled with renewed US interest will help keep Israeli innovation on track and further boost the local Hi-Tech industry, which is the Israel’s most notable economy’s growth engine.