Facebook Acquires Onavo In Latest High-Tech Acquisition

The recent wave of Israeli high-tech purchases by giants like Facebook, Google and Microsoft risks turning Israel from an innovation center in its own right into a Palo Alto-like research and development base.

al-monitor A logo for Onavo, recently acquired by Facebook. Photo by Onavo.

Topics covered

israeli technology industries, internet, high tech, facebook, computers

Oct 30, 2013

Now that Israel is turning into a Palo Alto-like high-tech base and its employees are sucked up into technology giants, it is liable to forget that it is, in fact, an innovation center in its own right.

Apple, Google, Intel and, these days, Facebook as well — they are all on the list. And if thus far, the list of high-tech development centers in Israel had a small asterisk next to it, denoting that Facebook alone had no local branch, then the giant from Palo Alto, too, has now given in to the Israeli talent, and it is bearing down on it full force.

Its might, much like the power of Google, Microsoft, Apple and others, is bound to bring about, before long, the engagement of dozens, if not hundreds, of high-tech workers for salaries previously unheard of in the local market, and lead to the relocation of others to Palo Alto, complete with the entire range of treats that multinational companies indulge their employees with.

However, the acquisition of the Israeli startup Onavo by Facebook is not just a cause for celebration, but should also turn on a warning light. The State of Israel is officially becoming an extension of Silicon Valley. An American investor visiting Israel may mistakenly think that he is in Palo Alto when, looking around, he sees the logos of those and other companies all over the place.

When Israel is becoming the Silicon Valley of the Middle East, it is losing what it really is. Israel is a hub of innovation that produces high-quality talents.

It is these talents that induced Mark Zuckerberg to give up his principles and to set up a research and development center in Israel. And while the Facebook center is a nice, and important, addition to the numerous local research and development centers, it does not fundamentally change the picture. Every year, one or another giant appears on the local scene, stirring a buzz. However, these giants are actually preoccupied with the pursuit of Israeli talent.

The acquisition of an Israeli company may be a cause for celebration, but it is also liable to be the source of endless trouble. The acquisition of a company like Onavo is a cause for celebration since, most probably, as an independent company Onavo could not have gone much further.

Yet, there are acquisitions that leave Israel bleeding — when a great opportunity is missed to establish a local company with extensive global operations, rather than another branch of a multinational corporation, large as it may be.

Trusteer, which was acquired by IBM, aptly illustrates the case. It is precisely that sort of company that, had it been willing to give up the huge sum of money offered it, could have become, like Imperva — which was established by some of the founders of Trusteer — an independent data security company with extensive global operations and business activity, rather than being trimmed down to a mere research and development center.

There is nothing wrong with the acquisition of local companies by foreign giants. However, it is no reason to open any champagne bottles either. Only when an Israeli company acquires a foreign company and becomes a real giant that dares challenge the global technology giants will there be reason enough for celebration. And when that happens, we will gladly open a bottle of champagne and toast our good luck.

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More from  Meir Orbach