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"To those critics who are so pessimistic...I say: Don't be economic girlie men." -- California Governor Arnold Schwarzenegger at the Republican National Convention After a long drought, a shower of deals is reviving Israel's Silicon wadis -- the collective term for the 12 high-tech industrial parks scattered around the country. On Aug. 25, Cisco Systems (CSCO
) paid $200 million for P-Cube, a Tel Aviv developer of network-traffic-management hardware co-founded by Giora Yaron. This is Cisco's second Israel deal in three months, bumping its roster of holdings in the country up to seven. "[The Israelis] have a very strong tradition of innovation in engineering," says Ned Hooper, senior director of corporate development for Cisco.
Cisco is not the only high-tech heavyweight sifting the sands for opportunities. The country is chock-full of startups developing cutting-edge software, medical devices, and networking infrastructure for the Web. Now many are ripe for the picking.
Israeli venture-capital funds, meanwhile, are restocking their coffers: Industry experts predict local outfits will raise over $1 billion this year, with most of the funds coming from American and European institutional investors. The wadis certainly could use the rain. The online grocery business is littered with failures -- notably Webvan, which raised $1 billion before collapsing in 2001. At New York startup FreshDirect, too, overaggressive marketing and service problems led to smashed tomatoes and red ink. But a management shakeup could lead it to profitability.
On Sept. 8, FreshDirect will tap Dean Furbush as CEO, BusinessWeek has learned. Furbush, a former vice-president of NASDAQ Transaction Services, joined as COO last winter, a few months before flamboyant co-founder Joseph Fedele stepped down from the top post. Already, Furbush has increased delivery fees and is adding new routes cautiously to concentrate on keeping the company's existing 100,000 customers happy.
FreshDirect's revamped strategy calls for adding a national mail-order service and business catering in New York, while delaying a push into other cities. That contrasts with rivals such as Peapod and Safeway, which are pursuing national reach. FreshDirect's eventual goal: to grow from around $120 million in revenues this year up to $500 million within several years. "We have to make sure we have a consistently positive experience," Furbush says. That means keeping an eye first and foremost on the tomatoes. Executive search firm Spencer Stuart's G100 group is the ?ber-exclusive club for the CEO set, hooking up chiefs from 100 top U.S. multinationals to exchange ideas. Now, ex-Spencer Stuart recruiter Rick Smith hopes for similar success with chief marketing officers from 50 companies, such as General Electric (GE
) and Kodak (EK
The Marketing 50, as the club is called, allows just one member from any industry in order to encourage discussion -- free from competitive pressure -- of issues such as the death of mass marketing. Despite a $50,000 annual fee -- same as the G100 -- Smith's Atlanta firm, World 50, sold out spots in just a few months. With an average tenure of just 22 months, CMOs "are scared, lonely, and can't go asking the CEO for advice," he says.
Members get twice-yearly meetings, conference calls, and access to research from partners such as ad agency WPP (WPPGY
). "What a find," raves Kodak CMO Carl Gustin Jr. Smith plans to create similar groups for chief financial officers and heads of international operations. Paris has the Louvre, Madrid has the Prado, and Buenos Aires has...the Museum of Foreign Debt. Set to open in January, the institution will document Argentina's habit of living beyond its means, from its first default in 1827 to its $141 billion default in 2001, the largest ever by any nation. "The museum will help ordinary people who are hurt by the debt issue but don't understand the technical details," says head curator Simon Pristupin, professor of economics at Buenos Aires University, which will house the museum. Funding for the project has been hard to snare, though. Why? The city government itself is heavily in debt. TV Broadcast networks are going gray. The median age of a prime-time viewer at ABC, CBS, NBC (GE
), Fox (FOX
), UPN (VIA
), and WB rose from 44.1 in 2000 to 45.7 in 2004, according to media researcher Magna Global USA (IPG
). That's faster than the uptick in the median age for prime-time TV viewers overall, which budged from 36.5 to 37.2 in the same period.
The numbers show cable TV siphoning off the younger viewers so precious to advertisers. So how are the nets planning to lure them back? How else? More reality shows. When eBay (EBAY
) bought 25% of craigslist on Aug. 14, some fans of the online classifieds site cried sellout. After all, with a homey informality, spartan design, and no ads, craigslist's cult-like following of 5 million visitors per month call it the anti-eBay.
But shy-guy CEO Jim Buckmaster, 42, insists the listings -- where you can find a job, a house, or a Friday-night date -- won't change. He's personally invested: gregarious founder Craig Newmark hired Buckmaster after seeing the ex-programmer's r?sum? on craigslist in 1999. Since then, the site's revenues from job listing fees have increased to an estimated $7 million in 2003 and expanded the Bay Area-based list to 45 cities.
As for eBay, Buckmaster says a former craigslist employee sold out his equity stake to the dot-com giant, which is eager to get in on the market for online classifieds. Ideally, says Buckmaster, "we'd have [had] the finances to buy him out ourselves." In any event, he'll have the cult of craigslist to keep him on target. George Jetson made getting to work look so easy. The 1960s cartoon character would simply hop into his flying car, which would whisk him off to the office. For the rest of us, traffic jams are part of daily life. But that may change in the not-too-distant future.
Thanks to advances in computing, materials, and robotics, several startups have developed flying car prototypes. Haynes-Aero, Moller International (MLER
), and Trek Aerospace are hatching vehicles ranging from a personal helicopter to a car that runs on the road but sprouts wings at the push of a button. Early versions could be put to use by U.S. soldiers to swoop in and out of urban combat zones.
Recent efforts from some big companies could help pave the way for commercialization of small flying craft. Honda (HMC
) has designed an experimental air taxi: a small, cost-efficient plane to ferry four or five passengers between small airports. General Electric (GE
) is helping build the plane's economical jet engine. The startups are hoping that Honda's involvement in taxicabs for the air prepares the marketplace -- and the government -- for widespread personal use of the skies.
That's essential because flying cars would require an overhaul of air traffic regulations just to get off the ground. Another problem: The vehicles require more tinkering to ensure they would be reliable and as easy to pilot as automobiles.
Still, the nascent industry is attracting the interest of venture capitalists. Timothy Draper, founder of Silicon Valley venture-capital firm Draper Fisher Jurvetson -- which launched online advertising company OvertureServices -- has solicited proposals from those developing flying cars. Who knows: It may not be long before you and your carpool buddies travel like George and Jane Jetson. The angry, big-issue documentary is having a vintage year. Making the biggest splash by far is Fahrenheit 9/11, Michael Moore's anti-Bush broadside. And a pair of feature-length films have taken aim at the behavior of Big Business: The Corporation, co-directed by Mark Achbar and Jennifer Abbott, and Morgan Spurlock's blast at McDonald's (MCD
), Super Size Me.
Now comes American Jobs, by freelance MTV producer Greg Spotts. After several pals were laid off, he turned his lens to unemployed workers whose jobs had traveled abroad. The film debuts on Sept. 9 in Kannapolis, N.C., where Spotts interviewed displaced workers. Fans can follow up by reading CNN anchor Lou Dobbs's new anti-offshoring book, Exporting America.