an Israeli startup located on the Tel Aviv shore line is attempting to revolutionise online gaming by creating a niche for casual online gamers. I had a chance to visit their offices and learn what they were up to during the past two years.

Originally, Funtactix attempted to create a “Casual” MMORPG (or Massive Multiplayer Online Role Playing Game) by using “procedural content generation” which reduced the production cost of the game. During 2007 they changed their approach. While casual online games remained the goal, the method changed and Funtactix started working on a series of smaller pvp (player vs. player) games the first of which - Slider Party, was recently released for open beta.

Funtactix new strategy relays on two unique concept : the first is the ability to use the same character in every Funtactix game. this means that any improvement made to the character in any one game, will reflect on the rest. The second advantage lies in an advance web interface that allows high integration with the games. The result is a “Social Network” based on our game characters - where each character has a profile with its picture, a list of achievements, a friends list and you guessed it folks, a wall to write on.

In an age where social network seem to be the new black, Funtactix new strategy seems to make a lot of sense. By creating a social network based on your character and achievements you provide the player with a more substantial goal long term goal (improving your character) while keeping necessary game time to a minimum.

It is also worth noting that while MMORPG hold a large part of online games, these are primarily designed for hardcore gamers. Even if Funtactix attempt at reducing production cost was successful, it is not clear how that would have reduced the play time required while at the same time keeping the game interesting.

Having said that, the transformation may require Funtactix to undergo a more complex change than they planned. Initially Funtactix relied on technology to gain advantage over existing games. With their new strategy, Funtactix abandoned its technological edge and must now relays on the content and community they are able to generate.

I mention this since I feel Slider Party lacks in this field for two reasons : The graphical design of the characters, a corner stone for the Funtactix universe is not engaging enough to make me want to improve it. Without some emotional connection between the player and his character it will be difficult to convince players to invest time (and money) on developing their character.

The second factor is the gameplay. While I can’t point my finger on a specific problem, Funtactix first game does not offer a significant edge over older online pvp games. Without offering players new game concepts - either new exotic weapons, unique play styles, exciting levels etc. It would be fairly hard to convince gamers to leave their current games and start playing in Funtactix Universe.

I believe that Funtactix challenge for the next few months will be to go the extra mile with its line of games and find a way to recreate an edge over the competitors. This can be done in several ways, all of which - in my opinion, revolve around the content.

Traditional search engines do not factor user preference while sorting results. Instead, they give sites absolute ranks and decide which sites are “good” and which aren’t. While this practice promise consistent results regardless of who conduct the search, it also makes it hard to connect the search term with the larger context it is being searched in.

Delver, an Israeli startup is attempting to change this paradigm by offering personalized search results based on the user`s “Social Graph“. This is achieved in two phases:
1.Users are required to add their name to search terms. Delver then search social networks in order to create the user`s social graph.
2. Then Delver search through information generated by your friends to locate relevant search results.
Unlike other search engines, Delver only crawl through information that can be linked to a user, such as blog posts, del.icio.us links etc. This means that Delver will crawl through web 1.0 sites only if a user has recommended it.

By offering personalized search, Delver should be able to provide better results by linking to niche sites, in opposed to traditional search engines that favor big, mainstream sites, which are often less relevant to the user.
Another interesting feature Delver offers is the ability to search under different identities, piggybacking on their social network to improve search results. Since the social graph determines sites’ rank, searching for gadgets as Michael Arrington might turn interesting results. This feature has a lot of potential, but requires additional effort (find which person is relevant to your search), and I fear that only a fraction of the users will take the time to explore it.

To Sum Things Up

Like many new technologies, Delver`s new search approach has a lot of potential. However, the key to success lies not only in their technological advantage but also in their ability to convince people to change the way they search the web.
While early adapters will be thrilled to experiment with Delver search capabilities, convincing the “Average Joe” to switch will take time and may require Delver to add traditional search engine results to their output. That way, users who are new to the system will still be able to get results even if they are unable to take full advantage of Delver search capabilities.* Delver were extremely cooperative in sharing their views and concepts with us. We are waiting to get some hands on experience with their engine. Stay tuned to our RSS feed

Quick & Dirty

• Delver, formally Semingo, was formed in 2005.
• Raised $2.25 million from Carmel Ventures in 2007.
• CEO Liad Agmon.
• website - http://www.delver.com
• closed beta starts in a few weeks.

As we all know, cold fusion was considered by many as impossible. However, an Israeli stealth company, named “H.A.V.A N.A.G.I.L.A Industries” from Ashdod, Israel, managed to solve one of nature’s biggest mysteries .

The Company, founded by Yuri Izvestia, a Russian Immigrant , told our site that after 1408 experiments, his company managed to create cold fusion reactor in a matchbox replica of a Delorean. The company, and its chief scientist, are nominated for a Nobel prize.

Things didn’t go well at start for the young immigrant family. After giving birth to two 3 eyed kids, Yuri decided not to continue conducting tests in the family living room, and moved his lab to a deserted warehouse in Ashdod. After 3 years of experiments,Yuri, and his small team, managed to reach first results, which were then presented to a well known French energy company. Negotiations failed as the French counterpart refused to keep the reactor in a Delorean, and insisted to move to a Peugeot model. After long debate, the parties decided to end the negotiations without reaching an agreement.

Cold fusion is nothing less than an energy revolution. The ability to create a fusion reaction in room temperature will change the way we operate car engines, produce electricity, and operate almost every machine around us. If their claims are true, N.A.G.I.L.A are going to change the world as we know it.

We are going to visit N.A.G.I.L.A HQ in the next weeks, email us for further information.

There are times that you look at a company and ask yourself - why no one is just buying these guys? Pando is one of these companies. The company is a provider of P2P content delivery technology, a much hyped market. The reason is simple - traditional CDNs such as Akamai, are facing efficiency issues when transferring HD content. P2P is more efficient by far, as it does not require a centralized server to handle traffic. With video usage skyrocketing, these issues are becoming a major challenge for the traditional CDN model.

The challenge for every P2P network is it size. P2P networks are totally dependent on the amount of peers connected to the network. Pando, that started as a consumer product for large file delivery, claims to have more than 10M of peers already installed. This, coupled with their strong business development and marketing abilities enabled them to win NBC’s content delivery contract, team up with the indie video platform blip.tv, join forces with PeerApp, P2P caching provider, for an ISP offering, and integrate with the CDN InterNap and its Dashboard product. That is what I am most impressed by - their activities are covering the value chain from A to Z, and it is refreshing to see such a thorough business development effort.

Yaron Samid, till recently Pando’s CMO, is very active in the East Coast video scene, as he established the NY 2.0 group, a periodic networking event for startups in this area. He is also helping Israeli companies in NYC, through his NY Israeli Tech group.

Their competitors are Bittorent’s DNA, the recently established GridNetworks, and Solid State Networks among others.

So, what’s the M&A opportunity which lies ahead? Traditional CDNs are buying P2P companies. As simple as that. By creating what’s called a hybrid network, a combination between traditional CDN and P2P protocol, the total content delivery cost is reduced, as P2P does not require a centralized content server. As HD traffic grows, CDN financial models face a major price challenge. And Pando are exactly in the right place - they have enough peers in their network to be valuable, deals with major companies, and strong management.

Oddly enough, Pando is almost the only company which didn’t raise VC funds in the last 8-12 months, according to The Business of Online Video.

It will be interesting to see how things unfold for this company. Till now they made the right decisions. I wonder if they can keep this track record, till hopefully being bought by one of the major CDNs.

I was recently invited to a quick meeting with a new Israeli startup company called TrekinU which is currently working on an online photo gallery dedicated for travellers. While the opening of a new photo gallery site is hardly exciting these days, the concept of a niche site for travellers sounded promising.

While the site itself is in early beta phases, I was able to play with one of its key features and create a short flash based slideshow. After a few short steps which included uploading my photographs, placing them on google maps (It is also possible to import the data from most gps devices) and finally uploading the appropriate background music, TrekinU platform was able to recreate my travel route and publish the flash presentation.

The whole process only takes a few minutes and the result, as you can see below, is very pleasing as the viewers can visually keep track of your travel route and know where each picture was taken. One thing that I found missing in the process was the ability to add text, however i was promised that the feature was already in development and will shortly be available. It is also worth noting that it is possible to add movies to the presentation in the same way pictures are added.

Having said that, if TrekinU wish to establish itself in the market it will need more than a feature rich presentation platform. The reason for that is two fold:
First - the current platform is based on existing technology which means it could be copied rather quickly. Update TrekinU have a pending patent for their player, if approved the it will offer additional protection.
Secondly - managing online photo galleries is time consuming and in most cases users will avoid maintaining an active account on more than one site. With the current dominance of several large companies such as Yahoos flickr, TrekinU may find it difficult to convince users to abandon existing galleries and move to their service. Furthermore existing travel communities do offer limited photo gallery capabilities and directly compete for the same target audience.

In order to deal with the competition TrekinU will need to decide whether it want to create a new social network and cultivate its own community, offer its presentation platform as an open API and integrate with some of the existing sites or perhaps focus on b2b strategy and offer its capabilities as premium service to group travellers.

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Few days ago, when I’ve covered InstallFree, I’ve mentioned Kidaro, one of it’s local competitors in the global desktop virtualization market. Last night we were informed that the company was acquired by Microsoft for an estimated $100M. This is another acquisition in just 4 months in the desktop virtualization market, following VMware acquisition of ThinStall, Citrix acquisition of XenSource, Sun acquisition of Innotek, and Microsoft acquisition of Calista.

Kidaro’s product enable virtualization of specific application, and not only full desktop. This is an enhancement of current Microsoft capabilities. The company was founded by Ran Kochavi, previously working in Keshya, and Itzik Levy, who founded the company after 7 years of military service. Its investors include Genesis Partners, Strom Ventures, and Opus Capital, and the company secured $10M back in December 2006. If you want to get insight on company’s life check this Facebook group.

I wish all the best for Kidaro in their integration process with Microsoft. It is not an easy phase for a startup. I also wonder whether Installfree’s technology is strong enough to gain market share with giants buying competitors in such a pace.

Like in every location where the High Tech industry flourish, networking events are part of the game. Israel is not different in this aspect. There are several important local events, such as iDrink, and the important work done by the coils.

And there is Jeff Pulver.

Yes, I know that he is a person and not an event, but when he comes to Israel, many people’s schedule are suddenly filled with dinners, breakfasts and cocktails.

Jeff has been involved with the Israeli Hi Tech industry for a long period, and invests in many of what he calls “early early stage” startups. These companies are usually not more than 2 guys in a garage with a smart idea. Jeff helps them to bring their dream to the next step. He is also very close to Yossi Vardi, who is invested in more than 60 Israeli companies, among them Foxytunes that we covered earlier.

What is unique in Jeff’s events? His commitment to help people interact. In his new venture, Social Media Breakfast, people are asked to physically tag each other with sticky notes, and post information on people’s physical wall (a white sticker on their cloths).

The core of Israeli Internet entrepreneurs is around 100 people. Therefore, in most of these events you meet many of the people you already know. That adds a feeling of a social gathering and fun, much more than a professional event. The stickers are also making the whole experience more on the light side. In the evening gathering, where alcohol is involved, things are even less formal. But through Jeff’s involvement in young startups, and Jeff’s publicity in local media, there are always some new faces in the crowd. So, it is a kind of meeting event for the local friends, and little bit of business. The endless energies of Sharon Kupper, the person who locally makes these event happen, are also a signature of these gatherings.

Evening cocktails, usually at the Galina or Landen (Hebrew link) are a different story. These parties usually have an interesting combination of geeks, VCs and local night life figures. From these events however, we don’t have any pictures…

Desktop, application and OS virtualization are hot segments in the IT world. With VMware acquisition  of ThinStall, Citrix acquisition of XenSource, Sun acquisition of Innotek, Microsoft acquisition of Calista, all in just 3 months, main players are gearing up to a head to head competition. Couple that with 2006 Microsoft’s acquisition of Softricity, which is the basis of their SoftGrid product, and its cooperation with Citrix on both server and desktop virtualiztion, it seems that this is the time for innovative startups to make some noise with strong technological advantage.

These are the hopes of Ra’anana based InstallFree, which developed both desktop and application virtualization products. Their InstallFree Bridge product, due to be released at the end of this month,  provides a full blown application virtualization, and has an edge on its competitors mainly due to their ability to work on lock down computers. Therefore, users can have guest permissions only on their desktop computer, but still run fully functional applications.  IT administrators don’t need to worry about OS settings, language, or other time consuming IT tasks.  This ability is one of their biggest advantage. It also provides better security, a major issue of desktop virtualization, as the latest VMware security issues show. In addition to that, the company claims that its distribution method reduces deployment effort.

Their second product, InstallFree Desktop enables users to work wiht  their native desktops on any computer in the organization, public PCs, or even USB sticks. There are several players in this market already, including the Israeli Kidaro. The product is due to be released in a later date.

The company was founded by Yori Gabay and Netzer Shlomay, who worked together at Gteko, which was acquired by Microsoft two years ago. The company provided e-support solutions to key vendors. As Gteko veterans, the founders had already deep understanding of both IT and end users needs in the enterprise. After developing their core technology, the founders conducted a market research with potential partners and customers - not the usual startup modus operandi.

Their VP of Marketing, David Karofsky, previously worked in EMC’s marketing group, as Product marketing specialist. Their Board is chaired by Yuval Ne’eman, who is also an advisor to previously covered Velingo, and an ex Microsoft VP.

The fact that the company didn’t release its product yet doesn’t change it chances in the acquisition market, as one can see from Calista case, which was acquired without a released product.

It is yet to be seen if their technological breakthrough and execution abilities will make them an acquisition target in the near future. There is also an open question re the ability of a young startup to gain a market position, where 800lbs gorillas, and their distribution network, already dominating parts of it. The founders believe that they have an edge,  the market is just opening up , and that the fact that market leaders are moving into this space only benefits them, as they educate the market.

The founders are focusing their efforts in launching their first products, and increase its exposure.

We will continue covering this interesting and under the radar company, and let you know how they are doing.

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Tags: kidaro, virtualization, microsoft, vmware, gteko, installfree, thinstall, citrix,

Disclaimer - Yosi Taguri and Shachar Nechmad are friends, who I know for years. However, their company, Nuconomy, is amazing regardless of our friendship.

The reason is simple. Unlike their competitors, such as Google analytics, Nuconomy are providing publishers, site owners, e-marketers, and e-commerce sites a robust  infrastructure for business decision making. 

Nuconomy does three smart things:

1. connect to whatever data collection sensors exist in a web site

2. Cross reference behaviors

3. Present the information in a simple and clear way

The applications of this platform are diverse:

1. An e-commerce site can identify interest topics per user, and present relevant products every time the user logs in.

2. A content site can push new information to users based on their past reading and topics of interest

3. Publishers can evaluate which content is the most appealing, most engaging, and most effective, according to their business objectives.

The core of Nuconomy in my opinion is their ability to tailor solutions for different online market players, based on their business objective. As a publisher, I know that this is what I need. Google Analytics can’t tell me which post generated most new RSS subscribers, does controversy actually increase my readership, or if the fact that I am embedding a lot of videos in my other blog actually increase readership.

Nuconomy can. And that’s a huge difference.

However, the flexibility of Nuconomy is part of their challenge. The way I see it, the company has two major challenges:

1. Their platform provide great information, but it is not suited for non analytical end users. Therefore, the key for their success is the ability to create vertical applications based on their platform.

2. Their platform is dependent on the information the site can collect. Therefore, they need to constantly interact with web technologies and analytics startups.

Nuconomy is an ecosystem game. If they will be smart enough to create a strong ecosystem of vertical application developers, coupled with strong relationships with new technology companies, they can change the way companies plan, execute and measure their online strategy.

WPP agrees with the potential, and invested $3M in the company. Yossi Vardi is also involved in this venture, as a seed investor of $300K.

Now, as usual, it is all about strategy and execution, for the guys who have the potential to kick Google Analytics out of the market.

I am using both Nuconomy and Google Analytics in Silicon Wadi Report. Let’s see which platform brings more value.

Additional coverage:

Techcrunch - some additional info on the technology

ZDNet

ReadWriteWeb

Tags: nuconomy, yossi vardi, startup, analytics, WPP, Google, investment, internet, ecommerce, publishing, yosi taguri, shachar nechmad

KnocaTV, the Israeli Internet TV startup, is facing major financial difficulties. The company’s employees, who did not receive last month salary, filed a motion to Israeli court to appoint a provisional liquiditor that would they salary payments. IVC Online, the subscription based industry database, describes Knocka as:

 KnockaTV is a network of professional interactive TV channels on the web, broadcasting short content which is internet produced or oriented. Knocka enables anyone to be a TV producer, editor or even live participator in its limited set of channels. Knocka viewers can interact through out many real time community features such as chat rooms, IM, video and voice

This is not another Internet TV death story. Knocka founders are the team behind the legendary Mirabilis, the ICQ creators, which was sold to AOL in 1998 for $407M. They raised $1M last June from Evergreen, and face a $300K debt, and 21 angry employees. Local newspapers are asking why the founders,  who benefited from ICQ exit, do not pay at least to employees.

It also seems that investors couldn’t untangle the  ownership structure of the mother company, I SEE U INC. The company requires additional $3M in order to open its site to the general public.

KnockaTV is another online TV casualty, like Revvr. It seems that Internet TV is not the dream field anymore.

Tags: knokcatv, icq, mirabilis, startup, israel, revvr, internet tv