Yahoo enters the Israeli market with a new R&D center in Haifa and an agreement with a local search engine.For many years, Israel has been an important center for global tech powerhouses like Google, Microsoft and Intel, who have recognized that the nation’s technical expertise, plus its strategic Middle Eastern position, can make a presence here decisive in the struggle for a piece of the billion-dollar Internet pie.
Now Yahoo will follow in the footsteps of these giants by opening a research and development center in Haifa, and entering into a strategic partnership with sabra search portal Walla!, according to a report in Israeli newspaper Ha’aretz .
The California-based company is currently negotiating office space in the Matam technology park in Haifa, which is already home to 50 other high-tech firms, including international players like Intel, Microsoft, Elbit Systems and Philips. Its research center, due to open within a few months, will attempt to carve out a greater share in the nearly $50 million Israeli search market, currently dominated by Google, which has R&D centers in Tel Aviv and Haifa.
Through the partnership with Walla!, Yahoo will develop local expertise in search-based advertising technologies such as pay-per-click and targeted search. Google currently maintains hegemony over this market, but Yahoo hopes to develop the technologies and databases behind Walla’s existing AdVantage platform, which will continue to be managed by Walla!.
“The agreement with Yahoo allows us to offer Walla’s surfers an excellent search product,” Walla CEO Ilan Yeshua told Ha’aretz. “The existence of another strong player in the search and textual advertising sector will contribute to competitiveness, both in the search experience and in the range of possibilities available to advertisers.”
Providing news, search and email services, 12-year-old Walla! is one of the most popular Israeli internet portals, holding the title of the nation’s most visited website for many years until it was overtaken by Google.co.il in 2006. 
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