Israel Internet Meeting Cooler, Less Hyped Than Year Ago

RAMAT GAN, Israel – It wasn’t quite gloom and doom, but it wasn’t a party atmosphere either at this year’s annual Israel Internet Association meeting, a gathering much smaller than last year’s, in part because of the lack of American and European visitors.

Participants at the meeting Sunday, who ranged from programmers to chief executives of Israeli Internet companies, described the atmosphere as more realistic and sober than the giddy heights of a year ago.

“Things are less optimistic than they used to be,” said entrepreneur Doron Shikmoni, president of the Internet group. “You can see everything that has happened to the high-tech economy” as responsible.

Shikmoni described the recent wave of job cutbacks and company failures in Israel as a “natural correction of an over-inflated market. It’s a reality check.”

But despite short-term setbacks, those who took the long-term view said the future is bright for the Internet industry in Israel and the world at large.

“There are many good companies out there. Don’t get excited about the bad news,” said Yossi Vardi, founder of Mirabilis, which became ICQ when it was bought by America Online in 1998 and became perhaps the biggest symbol of Israel’s Internet creativity. “We’re still at the beginning of the road. There are things coming on the Internet we haven’t thought of yet, or the Internet doesn’t have the technology for yet.”

Echoing those thoughts, but offering his own peek at the future, Netvision chief executive Gilad Rubinstein said that the Internet’s future is strong because it underlies virtually all businesses and even global events, now.

Rubinstein said his company, one of Israel’s largest ISP’s, is seeing its e-commerce business grow by 15 percent a month.

He said the biggest change he foresees is a drop in free services to a model in which almost all Internet products will charge some fee of the ultimate end user.

“Even if the price will be a few cents, it can change dramatically the bottom line of companies,” he said.

The two-day session drew less than 200, compared to more than 300 a year ago, said Internet Society spokesman Eli Landau. Along with Internet newsletter publisher and venture capitalist Esther Dyson, who was a keynote speaker last year, the 2000 event drew more than 100 other attendees from the U.S. and Europe. This year, the only American to come was consultant Aaron Marcus, who was presenting a seminar on computer user interface design.

Speaking on a day in which four were killed and as many as 50 were wounded in a terrorist bombing in the Israeli coastal city of Netanya, Landau said the U.S. State Department warning against travel to Israel has scared many from coming to the country.

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