Election Punditry

According to a Jerusalem Post poll published friday, Ariel Sharon's new Kadima is expected to win ~32 seats in the march 28^th Elections. Amir Peretz's Labor party is projected to win 25/26 and Likud around 12-13 according to the polls. The big loser will be Shinui who will drop to the low single digits (I can't say I am troubled by that given the virulent anti-religious rhetoric and policies)

4 months is an eternity in Israeli Politics so I have been asking the political pundits I know how they think these projections will change over time. 2 out of the 3 predicted that Sharon will lose a lot of those projected seats and end up in the teens with one predicting Peretz taking the victory and one predicting a comeback for Bibi Netanyahu Saying " He is good at getting elected." The third thought that the results will end up similar to the current polls.

I would be interested in reader feedback on how you think the election will shake out. What are your thoughts?

HOT: No Big Deal "Not everyone likes everything"

After my past posts (here and here) on HOT's big ad for pornography on the Ayalon Highway, see this correspondence (read from top to bottom) between Shlomo Kalish and HOT customer service. You can draw your own conclusions as to HOT's concern for your children's welfare.

Also, you can see all of the email addesses and phone #s you need to call and complain.

From: judith levy [mailto:judith.levy@hot.net.il]
Sent: Tuesday, 29 November, 2005 7:50 AM
To: Shlomo Kalish
Subject: RE: כתבו אלינו

שלום רב

זכותך המלאה כמובן.

לשרותך תמיד ויום נעים

יהודית לוי - פניות הציבור

Judith Levy

Customer Service

HOT

---

From: Shlomo Kalish [mailto:skalish@jgv.com]
Sent: Tuesday, November 29, 2005 7:46 AM
To: judith levy
Cc: Michael Eisenberg
Subject: RE: כתבו אלינו

בס"ד

לגב יהודית לוי,

לצערי התשובה שלך היא לא מתאימה מכיון ש:

1. זה נכון שלא כולם אוהבים הכל, אולם דברים שמפרסמים בראש חוצות, כך שזה נדחף לפרצוף של כולם, צריך להתחשב ברגשות כל הציבור, כולל ילדים, דתיים, מוסלמים ועוד. זה לא ערוץ פרטי שרק מי שרוצה בוחר לראות.

2. אכן נעביר את התלונה למועצה לכבלים וללויון, ולשר הממונה, ולעתונים.

בתודה - שלמה

---

From: judith levy [mailto:judith.levy@hot.net.il]
Sent: Tuesday, 29 November, 2005 6:15 AM
To: Shlomo Kalish
Subject: RE: כתבו אלינו

שלום רב

כל שעושים הוא באישור המועצה לכבלים וללוויין שמפקחת עלינו

צר לנו אך לא כולם אוהבים הכל ומתנצלים שלא אהבת

יום נעים

יהודית לוי - פניות הציבור

Judith Levy

Customer Service

HOT

Yahoo Vc. Google

Following up on my previous 2 posts on VC in the web 2.0 era, both of which generated a lot of comments, comes the latest "competitive threat" to VCs, Google and Yahoo (links News results). Read the following posts on Google and Yahoo entering the early stage investment business and competing with VCs for web 2.0 companies.

Om Malik on GigaOM on VC Google and Yahoo
Om Malik in B 2.0 on same topic (Full Article)
Search Engine Journal - Google and Yahoo Go VC


My personal opinion is that an entrepreneur ought to think twice before taking either Google or Yahoo's money at an early stage. Taking Google's money will likely dissuade Yahoo from becoming a partner and vice versa. Additionally, that is a great way to set yourself up for a small acquisition or a life of dependence on either Google or Yahoo.

Those great entrepreneur's who want to build the great big companies of the next century would do better to go it alone or look for a VC to partner with.

New Music Models?

See this post from Mark Cuban's blog. I think Mark is right on 2 counts. First, content wants to be free and accessible. Second, the Music Industry's model does not support that.

I would also add: Anyone in the path of the "Free Information/Content Tornado" beware!

Yet More on Google Vs. MSFT, Blogs and Web 2.0

• Check out this post David Jackson on the InternetStockblog on the impact of blogs on media. he also references a different section of the Graham post below.
• See this post from Paul graham in reference to my earlier posts (Me2 VC2) (VC Circa 2006) on VC in this era of web 2.0 start ups
• See this post by Paul Graham (it is long) on what Web 2.0 does and does not mean.

Below is an insightful excerpt from the Paul Graham post on the difference between Google and MSFT in the new user-driven web world.

"There's another thing all three components of Web 2.0 have in common. Here's a clue. Suppose you approached investors with the following idea for a Web 2.0 startup:

Sites like del.icio.us and flickr allow users to "tag" content with descriptive tokens. But there is also huge source of implicit tags that they ignore: the text within web links. Moreover, these links represent a social network connecting the individuals and organizations who created the pages, and by using graph theory we can compute from this network an estimate of the reputation of each member. We plan to mine the web for these implicit tags, and use them together with the reputation hierarchy they embody to enhance web searches.

How long do you think it would take them on average to realize that it was a description of Google?

Google was a pioneer in all three components of Web 2.0: their core business sounds crushingly hip when described in Web 2.0 terms, "Don't maltreat users" is a subset of "Don't be evil," and of course Google set off the whole Ajax boom with Google Maps.

Web 2.0 means using the web as it was meant to be used, and Google does. That's their secret. The web naturally has a certain grain, and Google is aligned with it. That's why their success seems so effortless. They're sailing with the wind, instead of sitting becalmed praying for a business model, like the print media, or trying to tack upwind by suing their customers, like Microsoft and the record labels. [7]

Google doesn't try to force things to happen their way. They try to figure out what's going to happen, and arrange to be standing there when it does. That's the way to approach technology-- and as business includes an ever larger technological component, the right way to do business.

The fact that Google is a "Web 2.0" company shows that, while meaningful, the term is also rather bogus. It's like the word "allopathic." It just means doing things right, and it's a bad sign when you have a special word for that."

Phew - The European Union will Supervise Krembos

Just when you though the European Union had no role in the aftermath of the Gaza disengagement, comes this article from the New York Times (excerpt below).

"In another development, the European Union said it would dispatch a monitoring mission to help the Palestinians run the Rafah border crossing with Egypt, under a deal finished last week. The European team will eventually comprise some 40 observers to ensure that customs and entry procedures meet international standards.

It will be just in time: on Sunday, Israeli customs agents blocked a shipment from Gaza to Israel of a popular confection of chocolate and marshmallow called "krembos." The illicit krembos displayed forged seals certifying that they were kosher. The chief rabbinate said that no kosher krembos were ever imported into Israel."

Does Anyone Think This Could Happen in Israeli Politics?

18 Year Old High School Senior Sworn in as Mayor

Click Here for full article

Recommendations on how to protest the HOT Pornography Ad

For those of you who want to see one piece (half) of the ad, you can click on http://www.ice.co.il/article.asp?pgId=87522&catId=1.. I am not advocating that you look at it though.

Figgy commented on my last post and made a great suggestion: "Figgy said...another angle would be to call azrieli and tell them you refuse to shop at their mall or bring clients to the corporate offices until the billboard is changed.

HOT doesn't care about you because you aren't their target market. However, azrieli wants our business.I want to recommend that you cut and paste the following letter and fax it to the CEO of HOT:"

So, I did some research work and got David Azrieli's work phone #. Feel free to call and suggest he pressure HOT. His # is 03-6199142.

You can also cut and paste the following letter and fax it to the CEO of HOT, Ram Belinkov

Dear Mr. Belinkov,

I am deeply offended by your large billboard advertisement for your pornography channel that you chose to hang above the Ayalon highway. That is a very public place and one frequented by many children for whom I am sure your pornographic content is not intended.

I urge you to take down the offensive advertisement

Sincerely,

the HOT fax # is 077-677-2999

If anyone has Ram Belinkov's direct phone #. Please feel free to email it to me. I will keep that confidential.

No Shame: Don't Take Your Kids on the Ayalon Highway

Driving to Tel Aviv this afternoon, I was shocked to see a huge billboard ad with a very revealing and suggestive picture of an unclothed woman. This was an advertisement for a Pornography channel on the HOT cable network in Israel.

This is outrageous. Is nothing child-safe? I do not feel I can take my kids on the public Ayalon highway anymore. They can't go the Azrieli Mall as this billboard is directly opposite the mall. Consumers, if you care about your kids and our Israel's values, then call or email HOT and protest.

Click here to email Hot
Call HOT - Phone #: 077-677-2626
Fax Hot: 077-677-2999

Call the Ministry of Communications and ask them to revoke HOT's license.
Email Form Click Here

Welfare State in a Global Economy - 6 questions for Amir Peretz

"......They feared appealing to their fellow citizens' intelligence by articulating plain truths. A state that spends 48% of its budget on social-welfare entitlements and 14% on interest payments on a growing mountain of debt, and can only invest 11% in modernizing infrastructure, has long since lost its ability to act. It is bankrupt. Any company that behaved this way would rightly be liable for fraudulent avoidance of bankruptcy under [country] law. An economy that requires at least half the hourly wage to be paid over to the government in the form of taxes and entitlements, and on top of that significant consumer and corporate taxes, is no longer competitive." (Click Here for full article from OpinionJournal)

"....This stab at transformation couldn't have come too soon. When XXXXX took over, [Country] was years into a steep recession. Tax revenues were in a free-fall even as the country handed over more money to welfare programs (with some 30% of its $70 billion budget going to transfer payments). The [Central] Bank, worried about inflation, had kept interest rates high, strangling an economy that the financial community was worried could collapse.

Even a year into XXXX's emergency economic reforms, GDP growth has remained anemic--just 1.3% in 2003. Some 10% of the work force is unemployed, despite the government employing one out of every three workers. And [country's] government expenditures total a startling 55% of GDP. U.S. expenditures, both federal and state, are less than one-third." (click here for full article from Opinion Journal)

What country and politicians are referenced above? Hard to tell? Click the links!

Sunday night, new Labor Party Leader Amir Peretz gave an impassioned speech laying out his new agenda and attempting to focus the coming election on social issues rather than security issues. He highlighted the growing gap between rich and poor in Israel and the need to aggressively attack poverty. He also said that (I do not have the text of his speech (they did not put in on the Labor Party web site) so this is a rough translation from memory) "In the 60s Israel was a welfare state and almost everyone was poor but at least it was just."

I agree wholeheartedly with Amir Peretz that we need to attack poverty and solve the growing income gap but his comment about reversion to a welfare state (I would argue that Israel is still a welfare state) left me aghast.

There are other ways to increase employment and attack poverty. What we need is capitalism with a heart, not a return to the old populist entitlement regime. Bibi readuced entitlements (kudos) but forgot to put together a worker retraining program (more on this in a coming post). To spur growth and increase jobs over the long term, the government needs to invest in long term infrastructure such as trains, highways, ubiquitous broadband internet access and education. We need to reduce taxes on the working poor to incentivize people to work more (second jobs should have lower taxes, not higher taxes)

So here is my list of 6 questions for Amir Peretz (I would be surprised if he answered since it is reported that he does not read English):

1. Do you really think that an increase in welfare handouts will reduce poverty and create jobs?
2. Who will pay for the increase in welfare payments? Are you planning on raising taxes?
3. In a global economy where investment capital is very fluid, do you think that raising the minimum wage and increasing taxes will attract investment capital to renew our infrastructure?
4. China has gone to a more capitalist society, Germany, the father of welfare states, is moving away from entitlements and toward more free-market capitalism to provide employment. Why would you take Israel in an anachronistic direction?
5. How can Israel make long term infrastructure investments (such as in education and ports) when the Unions hold up the entire country by striking at the first sign of change? (or will they not strike if you are Prime Minister?)
6. How do you think these policies will affect aliya? Especially from the US and France?

Lastly, sorry for the long post :(

Google-Domination?

Read two good posts from two different angles (network and content) on Google's efforts to dominate the internet of the future

Robert Cringely on Google owning web 2.0
Tristan Louis on Google Print: Copy and Pint

You can read this in tandem with my previous posts on Web 2.0 here and on MSFT Vs. GOOG

Israeli Politics: Big Bang?

For over a year, the political pundits in Israel have been talking about a coming big bang, the redrawing of the Israeli political lanscape and a break up of the traditional Labor/Likud duopoly. Prime Minister Ariel Sharon's announcement last night that he was leaving the Likud party to form a new centrist party has been heralded as that big bang. But is it? And, is that the real story here?

I think the answer to both questions is NO. Ariel Sharon will set up a new party but unless he wins 30+ seats in the next knesset (a highly unlikely scenario), we will have the same Right (approximately 40 seats in Knesset) Left (approximately 35 seats) balance that the knesset has now. The losers may be the "centrist" anti-religious Shinui party but more on that in another post.

With Sharon serving as a centrist anchor in the new Knesset, in all likelihood, he will need to form a coalition with either Labor or Likud. He will either tug the Likud slightly leftward or slow new Labor leader Amir Peretz's sprint back to Oslo.

I think the Big Bang is in another sphere. Sharon, at age 77, has decided that this is his last hurrah. That is why he feels he can break from the Likud. He is running on his personal accomplishments and credibility (from BBC - so take it with a big grain of salt). This race and this new party is about Ariel Sharon and nobody else. Interestingly, as I sat in traffic last night and listened to Amir Peretz's first major speech as Labor Party leader, I felt the same way. This race is about Amir Peretz. Pundit Hanan Crystal (see this AP link from the Labor Primaries as well) from Israel's Reshet Bet Radio, pointed out the same thing. Peretz constantly used the word "I" and rarely "we". "Join ME (my emphasis but it was obvious) for the social revolution." Ironically, Sharon and Peretz, the founder/aggregator of the Likud Party and Amir Peretz, the charismatic Labor Union leader are leading us into an era of Personal/Personality politics.

So, whither the parties of old. Who will it be, Bibi, Arik, or the guy with the mustache.

Me2 VC - Me2 entrepreneur

I received a lot of comments both online and offline on my recent post on the role of VCs in this web 2.0 time. I am excerpting one of the comments and want to add another comment in context of the following pieces by John Battelle and Om Malik:

Babble not Bubble by Om Malik
Tis-a-Season-to-Copy by Om Malik
Building a Better Boom by John Battelle in The New York Times

"Yori Said

I have been an entrepreneur for over 10 years now, and have worked with the whole range of investors – angels, bad VCs and top tier VCs – both Israeli and Silicon Valley ones. My experience is clear – I would *not* start another company without the backing of a top tier VC.

.... The market is tough out there, closing business, partnerships, hiring key executives is not easy. The credibility and support of a top tier VC is crucial and may very well be the difference between success and failure....

It is true that if your main goal is to start a cool Web 2.0 company and flip it quickly for five millions, VCs are not the right partner. In most other cases, there is no good alternative.

I highly recommend entrepreneurs to interview their VCs, and do some serious background check. After the second or third meeting, it is easy to identify the investors who will give you money, sit back and wait for you to perform, from the ones trying to figure out the strategy with you actively working with you. The latter are the creative ones, the ones sending you emails after midnight with new ideas and support."

I think that smart VCs (not the Me2 variety - see comment above), through a selection process and through strategic guidance, can help ferret out the best opportunities in what is inevitable a crowded Me2 web 2.0 field. There will be lots of copycats in this field and it will be hard for potential partners, bankers and buyers to zero-in on the long term winners. If your VC can help you zig while others zag or raise your profile to attract strategic partners or exit opportunities, then it will be worth the trouble of hanging out with us VC guys.

AOL – Free Does not Need to be Obnoxious

On Thursday I noticed that I had 2 new friends in my AOL instant messenger. Remarkably, no matter what time zone I am in they seem to be awake. Since I did not know them previously, I wondered how tweedledee and tweedledum made it onto my buddy list. Then I read this post from CNET on AOL foisting two new automated buddies on me: MovieFone Bot and ShoppingBuddy. Since I live in Israel, don’t go to the movies and my wife does or directs most of the shopping (see this link in case you missed it), I do not need them or want these new buddies. If AOL'’s grand move to free portal services and an ad supported model means that they will be more intrusive, then as far as I am concerned they can go back to the paid model. I certainly won'’t be shopping or movie-going through them.

In flight blogging

5:11 EST somewhere over the Atlantic Ocean

This is unbelievable I am sitting in my seat on the El Al plane over the Atlantic Ocean, writing and posting my blog in real time courtesy of a free trial account provided by my cellular carrier in Israel. The service is provided by connexion by Boeing. I planned to write on a different topic but this was too good to pass up.

The Service is a bit pricey. $30 for the entire flight or $9.95 for 30 minutes. It says that it is 11 MB but it feels a only a bit faster than dial-up. That having been said, for Frequent fliers like me, this is a great service that enables me to maximize down time and have more time at home or work when I land.

As this is El Al and filled with friendly and inquisitive Israelis, everybody wants to know what you are doing and has an opinion on it. My seat-mate told me that the Israeli Air Force had similar technology 15 years ago (read: what is the big deal!! -- been there done that!.......I should have known) and suggested that I turn off my computer and rest. "If you can't be off on the plane, then where can you?" he asked. Since he was so curious, I asked him for his name and offered him attribution for his comment in the blog. He would not share it -- that is top secret. :)

In general I think he is right. I am not sure I would pay for the service and I am so exhausted I just want to go to sleep. Ironically, however, I had a bunch of emails I needed to upload at the airport and the 2 Wifi networks in Newark Airport did not work. Fret not though, I just sent them off from the plane. What a world!

Signing off from 28,000 feet and climbing.....

Multimedia Shopping

Last night, I had an interesting shopping experience that I think exposes some of the issues that online shopping has not yet resolved.

It was 8:45pm in California (where I am) and 6:45 AM in Israel (where the wife is). We needed some clothes for our baby (more on that in next post) and my wife likes to shop at Old Navy.

There I was, running around Old Navy on my cellphone, taking the order/s from my wife in Israel who was looking at www.oldnavy.com to tell me what to buy. Yup, window-shopping online, so that I can physically buy in the store, hooked up by the good old telephone.

What led to this strange multimedia shopping experience?

1. International is still hard for online commerce for three reasons:

• Shipping is expensive and takes a lot of time.
• Customs clearance is also not smooth (see this report).
• Many online stores do not accept international credit cards.

2. Kids are hard to fit - They grow so quickly that it is easier to fit them when you eyeball the physical product rather than order by size chart.
3. Shopping Carts - when your computer or browser crashes and you lose your shopping cart, it is easier to use the phone to reorder than re-trace your web steps (I wonder if there is an opportunity in this?)

However, last night's experience did convince me of one major benefit of online shopping: Online, there are not three store clerks yelling at you to get out of the store at closing time when in the other ear, the orders keep coming :).

Venture Capital Circa 2006 and the Internet Era

See this article in the WSJ of two weeks ago on Internet entrepreneurs who are thinking about not taking money from VCs. As an active internet investor, this is something I spend lots of time thinking about. It is so inexpensive to start internet companies these days, that a crafty entrepreneur can bootstrap straight to profitability.

I still think that internet companies that are doing technology innovation in addition to unique business models will likely seek VC money to carry them through the early stages. However, this article is a wake up call. We VCs (especially in Israel) need to make sure we are adding significant value beyond the money, understanding the niches and spaces, challenges and opportunities in this fast evolving world. Relationships in the internet spaces matter as will the ability to recruit top talent in this still early industry. Entrepreneurs won't settle for less. The standard added value refrain won't cut it anymore. The good entrepreneurs are asking the tough questions and checking our networks and value. And, for good reason!

Entrepreneurs - any comments?

UPDATE: Religious Zionist Politicians Get Some Good Guidance

Update:I now received a copy of the letter. It is not exactly as portrayed in Maariv but you can see for yourself)

See this article from Maariv's online site NRG (sorry - the article is in Hebrew). 12 leading rabbis of Israel's national religious camp called on all Religious Zionist political factions to unite. While I have not yet seen the original letter this article was based on (I am trying to get a copy if anyone has it), the more important facet, in my opinion is that the Rabbis have de-emphasized the "Greater Israel" platform and attempted to re-focus the National Religious politicians on Education, social issues and religious/secular relations (see my post last week on the same topic). This was the historical calling of the national religious politicians until they abandoned it in the early 90s. Increasingly, I think, the younger generation of the National religious camp has a broad social perspective, giving rise to organizations such as Maagalei Tzedek.

While this focus on "domestic issues" does not grab as many headlines, it is THE important work in building a righteous, just and long-lasting society. I hope the current crop of politicians is up for this unglamorous but hard work. And, kudos to the new Rabbinic Leadership for countering earlier calls for refusing to serve in the army during disengagement by uniting behind this initiative.

More Web 2.0: Web Apps Vs. Search

See this post by John Battelle on the emergence of web applications as a second generation to search (be sure to read the comments as well). He does a great job differentiating between Search as a web based service, focused on providing a good experience for a mass audience vs. a search based application which will know more about you and provide other important tightly integrated functionality germane to the topic. This is a good read in tandem with my post on Microsoft Vs. Google of a few days ago (similar thesis although he says it better).
In a similar vein, Seth Sternberg, CEO of Meebo, posted this comment to my first post on IM.

"Seth Sternberg said...

Michael - meet meebo...a web-based IM client built in ajax. We started with the premise that a fair number of people were unable to get onto the IM networks because they were behind firewalls, couldn't download software, or were on computers other than their own. Eight weeks post launch, we've learned that people in fact have a visceral need to chat anywhere, and also that a number of people prefer a web application to software (30% of our users use us at home). We think that there are a number of interesting business models opened up by taking presence and integrating it directly with the web. "

By taking IM and making it a web application, Meebo hopes to integrate it more deeply with the emerging Web 2.0 applications. I think he correctly posits that presence and immediate interactivity should be an integrated part of these emerging apps and not an island of activity on its own.

More on Israel's Un-democracy from Former MK Yoash Tsiddon Chatto

I received the following email (it is a combination of comments from two emails to be exact) from former Member of Knesset Yoash Tsiddon-Chatto (picture on left) in response to my Thursday post on Israel's democracy. I received his permission to post it including the long article in Nativ (in Hebrew). I think you will find it interesting.

"I share your belief that the Knesset is not going to save us. It's like having water-buffaloes vote to drain the swamps. [when I] serve[d] in the Knesset where I was the first Member to diagnose, on record, the fact that most ills of our democracy are rooted in our system of government and to legislate a change. Historically, one of the fiercest opponents of the said law of direct election of the Prime Minister, which was emasculated during the four readings, was an MK named Moshe Katsav. Nowadays, President Moshe Katsav is disgusted with the functioning of the system he defended and appointed a "Presidential Committee to Examine (optimize) the Israeli System of Government". Don't worry, it has no executive authority. It may be a proof of integrity that he invited me to join as a Member." "I never "blogged" before (mentally too young to), hence I attach an article (Hebrew) that I wrote in "Nativ", Sept 2000, about convincing Prime Minister Ehud Barak to adopt a policy of constitutional change. It was a tremendous success that lasted about ten days, until he had to enlist "Shas' " vote to back his so successful "Camp David" policy . (I was glad to hear him mention yesterday on TV that this change is a "must". I'll blog after logging some more hours of fighting Cityhall --Yoash"

MK Tsiddon Chatto also sent me the Nativ article referred to above, which I have in .BMP format and I am happy to forward to anyone who wants it(just request it with your email address in the comments under the blog). I can't figure out how to include it in the blog without having it run 10 pages. I also was sent this website by another reader which is trying to drum up support for representative elections.

Microsoft Vs. Google

Here are a few very interesting recent posts on the battle between Microsoft and Google and my brief analysis below it.

1. Bill Gates rallies the troops on Internet Software Services (full text)
2. Ray Ozzie's Missive (full text)
3. Microsoft's Live: Monopoly 4.0 by Russell Beattie
4. The Bill & Ozzie-Show by Om Malik
5. Gates Memo Warns of 'Disruptive' changes at Cnet
6. Hypercamp on the Leak
7. Robert Cringley It's deja Vu All Over Again
8. Mary Jo Foley of Microsoft Watch -definitely a contrarian opinion
9. Link to Microsoft's live.com

Data (unique data) is at the heart of the next generation internet. Not software. Google understood this early and has been leading that charge. It is easy, using ajax and the like to roll out new "software services" (term taken from Bill Gates' memo. Personally, I prefer "data services") through Mashups and other simple mini-apps. But you need to own/control the data and make it easily available. That is the big difference in Google v. Microsoft as opposed to round 1, Netscape v. Microsoft.

Netscape, having built the web browser, walked right into Microsoft's power alley, software. They tried selling a browser, a server and the like and that played into Microsoft's strengths and dominance. Had Netscape adopted a different strategy like using the browser to open a home page to rich content, history might have turned out differently. Instead, Yahoo filled that role and is still around to talk about it. Google is going at Microsoft where the latter is weaker, content and data. It will take Microsoft longer to turn the ship and culture to combat this threat.

That having been said, don't count Microsoft out. There is a lot of data sitting in those Microsoft applications and file formats. I think Microsoft finally woke and up and realized that building a me-too portal was following Google and playing to Google's strength. The boys in Redmond have now taken a tack that will draw on their dominance in desktop applications and the data that sits in them. And, they will take out their formidable checkbook to do it. It is no wonder then that Sun, Google and IBM believe they need an open office assault on Microsoft's productivity apps (MS Office) and not just come at it from the data level.

see my previous post on Amazon and web 2.0

Parliamentary - Democracy???

In case you missed it, last night MK and Histadrut (Labor Union) Chairman Amir Peretz defeated MK and Labor Party Leader Shimon Peres in the Labor Party Leadership primary (official results here). Peretz, as he had promised throughout the race, promptly announced that he will be withdrawing the Labor party out of the coalition government, which will effectively topple the Ariel Sharon-led government and immediately launch Israel into general elections.

There is something patently absurd and undemocratic when 27,000 votes in a country of 6 million people can topple the government. Let me say this again: In a country of 6 million people, a total of 64,000 people voted, 27,000 voted for Amir Peretz and the entire Israeli government falls. Is that democracy?

What kind of stability can we expect from a "democracy" like this. Is it any wonder that in the history of the State of Israel only two governments have lasted their full term?? Political gyrations such as this can whipsaw an economy and a country, especially when the parties are so narrowly and sectorally focused as in Israel. (great wikipedia piece explaining this)

Moreover, these 27,000 people/voters and their leader will now cost the Israeli taxpayer hundreds of millions of shekels to fund the new elections (elections and parties receive public funding in Israel). This is at a time when Peretz himself says there is not enough money going to fight poverty and unemployment!

We need to change the system of democracy in Israel immediately and move to a form of representative democracy. Israel's current parliamentary un-democracy impedes progress, discourages long-term planning, and puts too much power in the hands of too few people. It is also a proven recipe for corruption, political favors and job handouts to party hacks. The problem is that the people with the power to change the system are the Knesset Members, who stand the most to lose from change.

I am beginning to think we need a people's movement to lead this charge. What do you think?

The Emergence of the Video Internet

The recent spate of Internet Video fundings by Silicon Valley VCs seems to be a harbinger that internet video has arrived. While some of the TV networks are porting their nightly newscasts to the web in a manual timeshift, others have grasped the novelty of the medium and are offering us video shorts or "media snacks" if you wish.

Make no mistake, video-watching on the internet is short-form. Metacafe (full disclosure: Benchmark is an investor in Metacafe - one of the earlier entrants), Revver, Youtube, ebaums world, ipod video are all distributing/narrowcasting shorts of one form or another. Some are clips from 22 minute network sitcoms, others are specially prepared shorts and still others are short bursts of action or gimmicky promotions (link to simply fired).

There is a lot of community building around these sites (see metacafe's P2P client and rating system). The content being added in the ratings and reviews is enhancing the video (the data if you will). If you check the Alexa rankings you will see steady growth of almost all of these companies.

I think that shorts has become the genre of choice for two reasons. First, this is a function of collective ADD (Attention Deficit Disorder) that all internet surfers seem to have. Second these video sites are frequented and contributed to by 12-28 year olds who are part of the IM generation. They are used to kinetic activity and short spurts of titilation.

Monetization stil remains an issue as are copyrights. Will video ads precede or follow these shorts? Would you watch 15 seconds of ads for 2 minutes of video? Revver has clearly taken this approach, tagging their videos with an ad wrapper and letting other sites take the content and drag the ads along. Will there be some sort of content licensing model that follows?

Do you think there will be wide use of video on the internet, what form do you think it will take? How do you think it will be monetized?

The Mafdal and TV

Not that I needed any more evidence that Israel's National Religious Party (Mafdal) has lost its way, but this morning's comment by Mafdal MK (member of Knesset)Shaul Yahalom is certainly a clincher. Yahalom asked the owners of Keshet, one of Israel's television stations to move the popular Eretz Nehderet program from Friday night to a weeknight so the religious public in Israel can spend 30 minutes wasting time in front of the television set. Wouldn't it be better if Yahalom suggested that his constituency and others spent that 30 minutes reading to their children, sitting around the table. I realize that Eretz Nehederet has somehow become a cultural phenomenon across Israel and of course, nobody wants to be let out. However, this was a golden opportunity for the Mafdal to reclaim the educational high-ground it ceded when it decided to focus on Greater Israel rather than educating the next generation of Israeli children. My suggestion is that instead of moving the program to a weeknight that families move the television set out of their house and spend more time together interacting as a family. It worked wonders for us.

Blogger Spell Check - Go Figure

Blogger has a built-in spell check to spell check my blogs. Only today did I notice something odd. The words Blog, Blogging, Blogs etc. are not recognized by the spell check. Go figure!

BlogMedia - Motivations and MO

Check out this interesting article on "Business and Blogs" from emarketer. I must confess that I do not belong to either of the predominant reasons for blogging. I was also amazed to discover that 60+% of bloggers rely on other bloggers for product information. That is amazing. I guess this is a quite a word of mouth community. Bloggers rely on other bloggers like I used to ask my friends for recommendations, despite the fact that they do not know them. (pssst...tell your friends to read my blog :) )

More on Matan Vilnai

After his meek exit from the Labor Leadership race, Yoav Yitzhak broke a story of Vilnai's taking improper funds. The timing is suspicious. It feels like someone is trying to kick him while he is down and finish him off. A leak?

New Media

Disney's Purchase of Living Mobile Games yesterday (see this post in the Red Herring on the deal) is another interesting foray of Old Media into New Media. Maybe Old Media is making its move.

Click Here for an interesting post by Robert Young on GigaOm. About NewsCorps opportunities after the Myspace acquistion.

Here is an excerpt
"Historically, advertisers have held little trust in content that is not tightly controlled editorially and, therefore, the value they are willing to attach for ads placed next to such uncontrollable content has been very low. The result is clear… MySpace ranks higher than Google in terms of pageviews, but Google will gross $6 billion in revenues this year, while MySpace will generate about $30 million. The delta, which can be measured in orders of magnitude, is almost unbelievable. I realize the comparison is not directly apples to apples, but even so!.........

But why would advertisers change their tune and all of a sudden attach higher value to community sites and user-authored content? One word… blogs. Blogs are proving themselves to be a powerful new medium, one that challenges traditional media for people’s time and attention. When an advertiser buys ads on Google and it gets distributed on the AdSense network, many of them are placed on blogs, without discrimination as to who authored the content. This dynamic is something new… advertisers gave up some control (where the ad is placed) in return for higher accountability. Put simply, Google changed the game, and now News Corp’s MySpace (and all other community services) can benefit."

We are still in the first inning of the emergence of this new media genre. Think about the media world 10 years ago and think about it today

10 Years ago	Today
Newspapers	Blogs (more on this in an upcoming post)
FM Radio	Satellite radio and Podcasts
VHS	DVDs
30 Minute Sitcoms	2 Minute Video Shorts (more on this in an upcoming post)

Advertisers, producers and publishers will all have to adapt. Most of the innovation has been grassroots or from new entrants. Newscorp's purchase of MySpace and The Disney/Ipod "Mashup" are, perhaps, examples of Old Media coming to grips with this new exciting world.

Little League Coach - Beware of Parents

After posting my first blog, the most common comment I received was that I left off my intro that I also coach Little League Baseball. Little League is welcome comic relief from a week's worth of VC activity. I like our Jerusalem little league because the parents are relaxed and friendly (for the most part - If you are an uptight parent, take heed). I cracked up when one of them sent me this comic from Yahoo! (also on the right of the page).....Don't we all know parents like this!

Good Web 2.0 Posts

Click on This from Om Malik at Gigaom on Amazon and its technology leadership.
Check out this from a month ago from Tim Oreilly. A good primer on Web 2.0

The Far Side of Israeli Politics

Israeli politics often feels like a circus. Yesterday's events, however, felt more like the Far Side. Labor leadership candidate Matan Vilnai, pulled out of the Labor primary in exchange for a promise from front-runner and current party chairman Shimon Peres that Vilnai will be defense minister and ostensible #2 in Peres' next government.

OK, let's get this straight, Peres the Octogenarian, chronic loser of multiple elections, leader of the dwindling Labor party (which is about half the size of the Likud party) promises that when he will become Prime Minister (when exactly? at age 85? 90?), and Labor will form the government (!), then Vilnai will become Minister of Defense. Does anyone actually believe this promise will be kept? Furthermore, Vilnai has spent the last 4 months insulting Peres and, to put it moderately, strongly questioning Peres' ability to lead labor.

Now, stranger things have happened in Israeli politics but.....

If Vilnai thinks this is a good deal then I hope he does not become Minister of Defense or have any other role in the country's leadership. As for Peres, I wish him a long life. He has done a lot of great things for this country. And, I do not want to see Amir Peretz leading the Labor Party or any party for that matter so I hope he wins this primary. But, this theater of the absurd is becoming harder and harder to take seriously.

Click here for Yediot Achronot's anlysis in hebrew
Click here for the Jerusalem Post news article in English