Israeli portal Walla Communications Ltd. (TASE: WALA) has signed a strategic cooperation agreement with Yahoo! Inc. (Nasdaq:YHOO) on Internet search engines. The companies aim to challenge Google Israel's three-year domination of the market, and provide an alternative to advertisers in the targeted advertising market.
Walla! has begun to upgrade its search engine as part of the agreement. Walla! launched its independent search engine a year ago at a cost of $1 million. Walla! will now be able to use Yahoo's innovative search engine, giving Walla! access to one of the world's largest online databases, including searches in Hebrew, English, and other languages. The version has been adapted to Israeli users by Walla's development department.
Advertising on the search engine will use the Walla! Advantage system, launched in May 2007. The system, which resembles Google's model, is based on pay-per-click, in other words, advertisers pay on the basis of the number of hits by surfers on textual campaigns.
Walla! CEO Ilan Yeshua told "Globes", "We signed a long-term agreement with Yahoo! that enables us to use its innovative search technology. The agreement follows the launch of our search engine at the beginning of the year. The business has caught on, and succeeded, with a great many advertisers already signing up."
Yehua says that negotiations with Yahoo! lasted for months. "We reached a deal that will last for years," he said. He declined to say precisely how many years. When asked if he believed that Walla! could create genuine competition for Google, he replied, "We don’t expect to win half of the search market in Israel, but we expect to become a significant player in Israel, and we'll grab a substantial portion of the market."
Walla is Israel's second largest portal, after Google Israel, with a weekly exposure rate of 73%, according to the TIM TNS/Teleseker survey in December 2007.
In addition to the collaboration with Walla!, Yahoo! plans to set up an R&D center in Israel. Natam Real Estate Group managing director Adina Cooper said that a large well-known international company had contacted it to find a good site for setting up a branch in Israel. She said, "The company asked to be located in the Matam Park in Haifa, even though it had little knowledge about Israeli real estate."
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2008
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