Unrest hits firms with ties to Israel

By Del Jones and Stephanie Armour
USA Today

U.S. companies with strong Israeli ties are finding that they cannot escape the impact of the bloody Middle East conflict.

• Business Layers says it had a competitor try to poach business by telling a client that the Rochelle Park, N.J., software developer has operations in Israel.

It backfired, says Business Layers CEO Izhar Shay, who is from Jerusalem.

"The client was offended and wanted to do business with us," says Shay.

• ActionBase, a San Francisco software company, does research and development in Israel. One in 10 of its employees there have been called to the Israeli army reserve, forcing the company to make sure all jobs are backed up.

ActionBase CEO Nir Erez, who came to the United States two years ago to run a spin-off of the Israeli company Eyron, says the biggest problem is raising money. Venture capitalists refuse to visit ActionBase facilities in Tel Aviv.

• Judith Richter, CEO of medical products company Medinol, who lives in Israel, says she has been in the United States to explain that "business is going on normally."

Many workers still go to restaurants and crowded places, so as not to let terror win, Erez says.

Employees don't linger long around the TV with each suicide bombing.

"When it happens every day, people talk a few minutes. Life goes on," Erez says.

Productivity has not suffered, company leaders say. If anything, the work force has grown more determined.

Israel, with a strong technology sector, ranks third in the world in the number of companies listed on the Nasdaq exchange.

Unrest has weighed heavily. Shares in Check Point Software Technologies, a company based in Israel and with a large operation in Redwood City, Calif., plunged 20 percent recently when it released first-quarter results that were lower than expected. It has fallen 55 percent since Jan. 9.

Check Point CEO Gil Shwed declined comment, as did the CEOs of several companies with Israeli ties. Shwed told investors in a conference call that weakness in the U.S. market was to blame.