Online gambling empire Cassava Enterprises (Gibraltar) Ltd. has not gone public, but one of its main shareholders, Avi Shaked, is already thinking about his next gamble. Shaked and journalist Avner Avrahami recently founded Shvoong.com, which aims at enabling every Internet surfer worldwide to summarize literary texts, while benefiting from Shvoong’s royalties.
Avrahami and Shked met in high school in Netanya. Shaked moved on to chemical engineering at university before ending up an entrepreneur of online gambling sites with turnover in the tens of millions of dollars. Avrahami went into journalism. He has served as editor of the weekend supplement of Hebrew daily “Ma’ariv” and editor of a “Ha’aretz” supplement, and is now, together with his photographer wife, Reli, writes the regular “Family Affair” column for the “Ha’aretz” Friday magazine.
Shvoong’s business model allows any Internet user to write an abstract of a literary or scientific work, upload it to the site, and get a 10% of the revenue Shvoong receives from Google (Nasdaq:GOOG) ads for the page upon which the content appears. Shvoong gets 90% of the advertising revenue, after deducting Google’s commission.
Shaked financed Shvoong’s set-up costs of several hundred thousand dollars, and he shares ownership of the company with Avrahami. Avrahami says the site already operates in 36 languages, ranging from English to Farsi, and provides automated translations in 14 languages. “Although we only have 3,000 abstracts to date, our vision is to fill the website with a lot of abstracts. The sky’s the limit.”
“Globes”: Aren’t you worried about copyright infringement?
Avrahami: “No one has cause to sue us. We have a legal opinion from one of the most important US law firms, and we operate under strict user terms. The writer of an abstract may not copy sections of a book, but only summarize it. For authors, the abstracts are advertising, since they boost awareness of a book. Some authors approach us to advertise on our website.”
Gambling spree
Shaked, his brother Aharon, and their partners Shai and Ron Ben Yitzhak expect to gain hundreds of millions of dollars from an offer to sell accompanying the IPO of Cassava, which operates gaming sites 888.com and CasinoOnNet.
The Shaked brothers invested Cassava seven years ago, and own 80% of the company; the company’s founders own the other 20%. Cassava is expected to hold its IPO at a company value of $1.5 billion, which means that Avi Shaked’s holding is worth about $600 million.
Published by Globes [online], Israel business news - www.globes.co.il - on August 8, 2005