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Microsoft to go it alone in Israel

Microsoft is to take sole control of MSN Israel, the Internet portal it currently operates in partnership with Israeli ISP Internet Gold, the firms announced at the weekend.

It seems that Microsoft will acquire Internet Gold's 50.1% share in the venture for an undisclosed sum, to give it 100% ownership of the portal.

The companies did not publish further details, simply stating that they are currently "discussing the terms of migration and possible future cooperation".

According to various local press reports, the transition will take place by October.

"We have been happy to partner with Microsoft in establishing MSN Israel over the last eight years," Eli Holtzman, CEO of Internet Gold, said in a statement.

"Given the change in the parties' online strategies we have agreed it makes sense for Microsoft to operate msn.co.il independently. We believe this is the right move for both parties and anticipate it will have a positive impact on our results," he added.

Indeed, the move backs up Microsoft's strategy of having majority control of all its MSN portals. MSN operates in 44 countries worldwide, and in most cases its local operations are 100%-owned by Microsoft.

"Our relationship with Internet Gold has worked well to establish strong foundations for our online business but both parties now feel that the time has come to operate independently to allow us both to deepen our impact on the Israeli market," said Danny Yamin, general manager of Microsoft, Israel.

"We are very excited about our future in Israel and see some fantastic opportunities for growth and development of both the MSN portal and the Windows Live services," he added.

Meanwhile, Internet Gold was keen to play down the importance of MSN Israel to its business, noting that the portal accounted for less than 3% of its total revenues last year.

Internet Gold reported revenues of 1.18 billion shekels (US$306 million) in 2007, up 188% on-year, although the bulk of that increase was attributable to the merger of 012 Golden Lines into the company's Smile.Communications brand. On a pro forma basis, revenue growth was 6.6%. The company posted net income of 158 million shekels ($41 million), up from 26.3 million shekels in 2006.

012 Smile.Communications provides broadband and fixed-line services to business and consumer customers. Following its IPO in October 2007, Internet Gold owns 72.4% of 012 Smile.Communications.

Internet Gold's portfolio of Internet portals and e-commerce sites, including MSN Israel, is held via its wholly-owned Smile.Media unit.

"During the last few years, the Internet Gold Group has significantly expanded its activities in a variety of communications areas and, as a result, our MSN Israel operations currently represent a minor portion of the group's total revenues," said Holtzman.

Thus, we have decided recently to change course and seek alternatives for growth," he concluded, adding that Internet Gold would seek opportunities "in and out of Israel".

Источник: Total Telecom

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