Every other aspect of IBM-Lotus's acquisition of Israeli company Ubique is overshadowed by the lack of numbers. IBM is not prepared to disclose how many millions of dollars it paid to buy outright ownership of Ubique, even though it is a public company in the US. This is perhaps the reason why the acquisition was recorded in the name of IBM Israel, a private company in every respect, even though it will have nothing whatever to do with Ubique.
In September 1995, AOL (America On Line) bought Ubique for $14.5 million. In the three years that have gone by since then, AOL did not retain 100% ownership. It sold part of its holdings to other companies or investors, but details of these deals were never disclosed. In these three years, Ubique evolved from the world of entertainment to the world of business. IBM is now acquiring outright ownership from AOL and the other international investors.
Ubique was the first Israeli Internet company to be sold to a foreign investor. That was in 1995, but now, after Cisco's acquisition of CLASSData and other acquisitions before that, it has become history.
Ubique was founded by Professor Ehud Shapira, who developed, together with colleagues at the Weizmann Institute, computer networking technology before it became a world-wide phenomenon. The technology was patented jointly by Shapira and the Weizmann Institute, but it is no longer in use.
On the basis of the old technology, Shapira and a group of fifteen engineers headed by Avner Shafrir then developed the Virtual Places technology that displays people and enables them to have virtual meetings on Internet sites. Virtual Places was first presented by Ubique in March 1995 at an exhibition in Las Vegas. Ubique then identified the large gap between the vast number of sites and users on the Internet, and the fact that the individual user surfing these sites never meets or sees the other people at the same site at the same time.
A year after the acquisition, AOL announced the start of a Virtual Places service on the Internet, but it became clear over time that the big money and big business were not to be found among chat service users.
Avner Shafrir: "AOL's head isn't into technology. Ubique was acquired as added value in the entertainment field, but Ubique's vision remained technological, and its technology was enhanced as time went on, partly thanks to investment by AOL, which independently came to the conclusion that Ubique should transfer to the business market." For that reason, at the end of 1997, the other investors came in, and for that reason the company is now being acquired by IBM.
In practice, the acquiring company is IBM subsidiary Lotus, which specialises in work-groups. Up to now, groups have worked together using Lotus software asynchronously. Ubique's technology will enable Lotus to make its services synchronous, so that someone working with a document will know when another user accesses that document, and will even be able to communicate with him in real time. The document could be on the organisational network or on the Internet. This is all within Lotus's strategy known as Sametime, of which Ubique's present and future products will become part.
Published by Israel's Business Arena on May 20, 1998