Boston, MA 10/22/2013 (wallstreetpr) – It seems that Israel has become a one stop destination for all tech giants looking to acquire innovative and technologically disruptive companies. In a filing with the regulators, social media giant Facebook Inc (NASDAQ:FB) has confirmed that it has made an all cash offer to buy a promising Israeli startup named Onavo. Though company has not disclosed the deal size, market trackers believe it to be somewhere in range of $100 to $200 million. This is a significant development for Facebook as it was left behind in Israel when Google bought Waze some time back. It was rumored that Facebook was also in race to buy the said company. But now, Facebook has found something to latch onto in Israel.
Onavo seems to be an interesting choice for Facebook as it is operating in mobile phone category, which is one of Facebook’s key focus areas these days. Company followers have disclosed that Onavo has developed a revolutionary technology to compress data on smartphones, which if properly utilized can reduce consumption of data in handheld devices by as much as 80%. This Tel Aviv based start up uses cloud technology and servers to re-route the data flowing through user’s hand held device. One example where this technology can be helpful in daily life is for people travelling to different countries, where this technology can help reduce the costs of data usage on roaming. As per Facebook’s spokesperson, this technology can be a game changer as it will allow more people in developing nations to join the internet bandwagon using handheld devices. This development highlights the growing importance of Israel as an innovator nation. Facebook has publically stated its intent of opening its first R&D center outside US in Israel.
Though 131 billion dollar company is too large to be affected by this small news, it is quite possible that price paid by Facebook for Onavo may turn out to be a bargain in years to come.
