Dead Tech Sea: Once-Hot Israeli Internet Firms Feel Wall Street Pain

TEL AVIV, Israel -- It's another black night for investors on Wall Street. The

Nasdaq

dived 7% to an all-year low, but in the Internet sector, it's an all-out slaughter. The

Goldman Sachs

Internet index lost more than 12%. The red on the screens provides the color draining from investors' faces as they watch the carnage, sparsely interspersed with the relief of the odd patch of green.

Just two months ago,

Sapiens International

(SPNS) - Get Report

was supposed to merge with Tel Aviv-based software house

Ness Technologies

, with its 1,500 employees. The deal was supposed to be a reverse merger, with Sapiens taking over Ness at a ratio of 1:3. Sapiens lost 30% tonight, bringing its share price below $1, and its market value to $19 million. That's for the whole company. The annual cost of running Ness' fleet of cars comes to more than that.

A year and something ago,

Internet Gold

(IGLD) - Get Report

was traded at a market value of a billion dollars, after being warmly recommended by an American journalist.

One wonders if he still likes the share. Tonight, he could buy the share for $2, or the whole kit and caboodle for $35 million, and that includes the Israeli ISP

NetVision

.

Aladdin Knowledge Systems

(ALDN)

, the veteran high-tech company founded by the Margalit brothers, has known better days, too, peaking at a market cap of $510 million. Aladdin is well-known, a leader in its field, profitable, and traded at a modest multiple of 11. One of its products appears on the list of most-popular software downloads in the world. None of that is any help tonight. If you have it in hand, you can snap up the company for $42 million.

Only in Ramat Gan

The examples go on and on and on.

CommTouch Software

(CTCH)

sank 22% to $60 million plus. Veteran

VocalTec Communications

(VOCL)

ended the evening at a market cap of $50 million.

But why fixate on the smaller companies? Let's peer up at the giants, the darlings of Wall Street, the titans of the business world. Well, they're crying tonight.

Microsoft

(MSFT) - Get Report

shares can be had for $47 tonight. The company's market value is down to $227 billion, half its value at its peak. Mister Softee indeed.

What about

Cisco Systems

(CSCO) - Get Report

? It replaced Microsoft as the No. 1 tech company in the world. With its aggressive acquisitions policy, it is the future. But its present is nothing to write home about. Today, Cisco stock lost 12% after

Merrill Lynch

downgraded it. You got $260 billion, it's yours. Cheap? Its multiple is still over 100.

But there's one company traded on Wall Street that sits in Ramat Gan, which lost "only" 6% tonight, and is still traded at a market value of more than $20 billion. More than

Amazon

(AMZN) - Get Report

, more than

eBay

(EBAY) - Get Report

, even more than the erstwhile queen of the Internet,

Yahoo!

(YHOO)

. That would be

Check Point Software

(CHKP) - Get Report

, of course.