Mideast crisis takes toll on tech
As news of the latest tensions in the region filtered through the corridors at the Etre conference, the Israeli entrepreneurs in attendance said they didn't expect any lasting fallout retarding the growth of their local technology market.
"We're not talking about a country that has faced this kind of thing for the first time," said Eli Barkat, the chief executive of BackWeb. "I still say that the most dangerous thing you can do in Israel is to drive on the highways."
Like many other companies founded by Israelis, BackWeb's marketing and sales headquarters are located in the United States, and thus the company is able to operate even in the midst of a major political flare-up. Still, Israelis, who are heavily represented at this conference, expressed caution in making any predictions.
"In the short term, I expect that there will definitely be some effect," said Isaac Levanon, the chief executive of FlyOver Technologies Inc. "For instance, the Telecom 2000 conference is set for the beginning of November, and I wouldn't be surprised if there were some cancellations.
"Also, you might see some effect if somebody was planning to fly to Israel on business and their spouse won't let them fly because of the situation," he added.
To be sure, there are ripple effects. For instance, political tensions figured into Scitex Corp.'s recent decision to delay spinning out one of its units as a public company. Scitex President Yoav Chelouche said advisers counseled him to wait, suggesting that concern about the Middle East situation might dampen investor enthusiasm for Israeli initial public offerings.
On Thursday, shares of Israeli technology companies got pounded on Wall Street. But the context for the sell-off was the general drubbing of the Dow and Nasdaq as worries about oil contributed to the general nervousness.
Like fellow Israeli executives here, Ayala Rahav, the CEO of Homing Inc., said she was "horrified" by the pictures transmitted by television, but dismissed suggestions that the news would constitute a serious blow to Israeli startups.
"For research and development purposes, Israel is one of the best places to be," she said. "The stock market reacts to immediate events. Something can be today's crisis and forgotten a month from now."
During one of the breakout sessions at Etre, which concludes on Friday, Jon Medved, a senior partner with Israel Seed Partners, said the country is so awash with venture capital money that "someone would need to be brain dead not to get funded."
But that was before the latest outbreak of violence. After watching the reports carried on CNN, Gali Idan, the sales manager of Koldoon, sounded a more restrained note.
"It's really too early to say (whether there will be lasting effects on the Israeli high-tech market)," she said. "But if it doesn't stop, investment might stop."