Google and the Industry, Trade and Labor Ministry launched a joint initiative Wednesday that aims to help 20,000 small- and medium-sized Israeli businesses create a website within a year.

AsakimOnline (Businesses Online) offers SMBs a variety of website templates, a domain address and Web hosting. Any business with an Israeli phone number can establish and maintain a website free of charge for the first 12 months. Businesses that wish to maintain the website afterward will pay NIS 860 per year.

Although Israel is a world leader in terms of the Internet sector’s contribution to gross domestic product, e-commerce is still relatively small because 51 percent of Israeli businesses have no online presence, Google Israel CEO Meir Brand said at the Tel Aviv launch. The situation was particularly dire in the Negev, Galilee and Jerusalem, where 60% of businesses operate without a website, he said.

“For a small business to operate without the Internet today is akin to operating without a telephone,” Brand said. “Millions of Israeli consumers search the Internet for businesses that cannot be found, and that is a shame.”

The problem was largely one of cost, he said, citing internal research that found Israeli businesses pay on average twice what their counterparts in other Western countries do to establish and maintain a website. Israel was the second-most expensive of 14 countries surveyed by Google, trailing only Denmark, Brand said.

According to a report released last March by international management consulting firm McKinsey, three-quarters of Israelis purchase goods and services at “bricks-and-mortar” establishments after first researching online, placing them among the world’s most frequent users of the “research online, purchase off-line” method.

Industry, Trade and Labor Minister Shalom Simhon said the government had made promoting small- and medium-sized businesses one of its priorities.

The approximately 450,000 SMBs “are the heart of the economy,” he said.

The government would soon introduce a bill that would ensure any changes to business regulation take into account how SMBs are affected, he added.

Simhon compared small- and medium-sized businesses operating without a website to farmers who operate only within a specific region. For example, he said, his favorite strawberry producer “has the tastiest strawberries in the country, but nobody knows about him.”

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