Popular Portal Goes Public on Tel Aviv Stock Exchange

Following weeks of speculation, Walla Communications’ will be the first
Internet portal serving the Israeli public with a listing on the
Tel Aviv Stock Exchange (TASE).

Walla Communications (formerly Mashov
Computers Marketing Ltd.), one of a handful of Internet companies traded
on the TASE, decided to raise funds after the company profits rose more
than 1,400 percent during the last year.

Walla Communications is best known for its portal Walla!, a leading
Israeli portal serving about 50,000 customers a day. The site offers
more than 80,000 e-mail accounts, chat groups, forums and the newest service:
free Internet site building.

The site sparked the interests of
investors, who are very familiar with the success stories of Yahoo! and
the like, said analyst Zkiva Elberger. However, he adds, we should
remember that this is a losing company, with an income of less than 10
million NIS ($2.4 million) this year and is traded today locally at a market value of about 110
million NIS ($27 million).

Pini Sternshos, Walla’s vice president for marketing, emphasized that
the company is always coming up with innovations and new site
additions.

Within the next few days, Walla is slated to come out with a
new consumer magazine, called V-Shop, that will compare product costs
online and with a food magazine, that will be associated with a TV show
on this subject. The Walla organization has doubled in size and they
are currently in different stages of integration with at least a dozen
cooperative ventures for services, content, communities and electronic
commerce applications.

Has Internet stock fever struck Israel? Elberger said that he sees the
beginning of this and that Israeli investors are ‘hungry’ for the
Internet. This is obvious with Walla stocks climbing over the last few
months, due to the rumors about a big deal brewing, and that even other
Walla company stocks, related to the Internet, jumped due to the sites
or the services they would supposedly provide via the Internet. On the
other hand, aside from Walla, there is no other Israeli stock that is a
‘pure’ Internet stock. No other portal but Walla is traded on the local
exchange and it is hard to infer from this how similar stock would fair in the future.