Yahoo! Inc. (Nasdaq:YHOO) is in advanced negotiations to acquire 30% of Homeless.co.il, which has become the main search engine for apartment rentals and purchases in Tel Aviv and central Israel, at a company value of $15 million. Homeless is negotiating with other parties as well. The website was founded in 2000, and covers the entire Israeli real estate market.
Yahoo! has been seeking investment opportunities in Israel for several years, but has not made any to date. The acquisition of Homeless would greatly strengthen Yahoo!’s presence in the Israeli market, where it is mainly known for its e-mail services and as a search engine.
Homeless is a profitable company, at least for the past two years. The company posted a profit of NIS 4 million on NIS 6 million in sales in 2005, thanks to 120,000 hits a day. The company’s revenue model includes payments from advertisers and free searches by people seeking information.
The company has 12 employees. Homeless CEO Paz Dror, 32, previously worked for Comverse Technology Inc. (Nasdaq: CMVT), which he left to found the website. He is the sole investor in the company, and Yahoo!’s offer in the first investment offer the company has received.
In a previous interview with “Globes”, Dror said he had received buy-out offers from Israeli portals, but that he always replied, “I want to buy you, too.”
Dror said in response, “Homeless is only the tip of the iceberg in terms of the company’s activity, which continues unceasingly to achieve technological and social innovations. Naturally, these activities attract many investors who want to share in the company’s unique vision.”
Homeless, which mostly benefits from viral marketing, recently launched an advertising campaign, possibly because of the growing strength of a competitor, Yad 2, which achieved an exposure rate of 11.6% in September, according to a TIM/Teleseker market survey.
Published by Globes [online], Israel business news - www.globes.co.il - on October 17, 2006
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