January 17, 2008 By Red Herring

Benchmark Funds Israeli Toolbar Maker

Conduit, an Israeli maker of white-label toolbars and syndication tools, has closed on an $8 million round from Benchmark Capital, the companies announced Thursday.

The funding round will be used to expand marketing and research and development for the 3-year-old company, whose technology was spun off by Israel's Weizmann Institute of Science.

Conduit's toolbars are designed to battle the "attention deficit" of web surfers who are prone to leave a favorite web publisher's page, said Michael Eisenberg, a Benchmark general partner.

By installing a toolbar in the Internet browser, the web publisher is able to maintain contact even when the user is surfing elsewhere.

"The beauty of our solution is, for publishers, it's an extension of their web site," said Ronen Shilo, founder and chief executive.

For instance, users of the Greenpeace International toolbar get environmental news alerts, a listing of related web sites and the latest content from the Greenpeace site. Users of the Lufthansa toolbar, meanwhile, get flight status alerts, weather information and booking engines for flight, hotel and car reservations.

The software also is used by the World Wrestling Federation, rap star 50 Cent and Major League Baseball, whose toolbars are tailored for each team.

While publishers seek closer ties to their audience, Conduit reaps revenue from users' online searches.

Mr. Shilo said the company, already cash-flow positive, takes the revenue spun off by users who search Google through its toolbars.

So far, Conduit toolbars are used by more than 140,000 publishers, he added.

The latest funding follows a 2006 round from Israeli venture capitalists worth about $1.5 million.

Aside from rival toolbar makers, Conduit's competition for web surfers' attention comes from many sources, including RSS (really simple syndication) feeds and personalized home pages from the likes of Yahoo and Google.

Mr. Eisenberg, who sits on the Conduit board, hinted that the 35-person company, based in Rehovot, Israel, will use the funding round to go beyond toolbars.

"We'll be expanding our syndication solution broadly in other formats," he said.

Conduit's toolbars are compatible with both Internet Explorer and Firefox.

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