Internet Zahav Prepares to Go Public on Wall Street

Internet Zahav, one of the two largest Israeli Internet
providers, intends to go public next month on the American stock exchange. To ramp up to its IPO, its executives are now promoting the ISP in a road show throughout the US.

In addition the company has published its first
prospectus, in which it was stated that they have 125 thousand
subscribers.

Internet Zahav expects to raise at least 50 million
dollars in exchange for 25 percent of its stock, setting the company value at US$200 million.

Analyst Tzvika Elberger says that established Israeli providers are
planning ahead, especially since the competition in this area is getting
tougher and other companies have begun to offer special deals.
These
deals include free surfing from companies like Barak, which is a partnership
between Sprint, Deutsche Telecom and France Telecom, Israeli TV
cable company MATAV, and Israeli investment company Clalcom.

To
fight the competition, established companies are entering into joint venture agreements and stock purchases. For example, Netvision, the second largest Israeli provider,
has begun to provide support for Microsoft software and has entered the
content sector through their newly active portal. Israeli mobile phone company Pelephone and Internet Zahav have a stock purchasing agreement.

Elberger estimates that most of the service providers, including the
most established and the most successful, will eventually lose
their relative advantage following the market entrance of cable companies and
subsequently rival infrastructure providers.

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