The diffusion pattern of an innovation such as the Internet is a function of economic, political, cultural and geographical factors. In addition, business models vis-à-vis the cost to access the Internet also influence the diffusion of the Internet. Since social systems worldwide differ significantly in terms of these factors, diffusion patterns of the Internet also vary widely.

Israel was an early starter regarding the development and utilization of computers, assembling the first computer at the Weizman Institute in the early 1950's. Mainframe usage diffused quite rapidly, particularly in the 70's, when the share of expenditures as a percentage of GNP increased from 1.19 percent in 1971 to 2.14 percent in 1976, a growth rate exceeding the growth rate of GNP by 80 percent. During this period, the number of computers increased from 229 to 529, and the number of personnel increased from 1,623 to 3,205. A more rapid rise in computer diffusion occurred with the development of the personal computer. Initially heavily taxed as a luxury product, the government made a strategic decision to promote personal computers by eliminating all tax with the exception of VAT. As a result, PC's have rapidly entered the Israeli marketplace. Today there is currently approximately one PC for every two households in Israel, a ratio similar to that of the U.S. [9]

One of the ways Israel tries to broaden Internet diffusion is to promote email usage and other e-government initiatives to link business, individuals and government. The Kassefet (Strongbox) Project consists of the Establishment of a secure online mail system for businesses and citizens. The system creates a secure personal file in which all correspondence between the citizen and government ministries will be saved if the citizen requests it. [10]

Israel stands out from its neighbors with

• an advanced telecommunications infrastructure
• access to telecom infrastructure at affordable prices
• substantial personal and corporate uptake of computers
• high literacy levels
• government encouragement of ICT use and Internet in particular
• positive community attitudes regarding messaging and electronic publishing
• little evidence of gender divides in ICT across the population at large
• adoption of email for linking a global diaspora
• acceptance of teleworking and other technologies for engaging with international markets.

As 2004, the government claims that around 50% of the population has internet connection at home, with over 65% through work or home [13].

Digital Television and Web Convergence
The diffusion of digital TV in Israel is enabled by the Cable TV network and by Digital Satellite TV. They also provide Internet broadband access. On the other hand broadband Internet providers offer access to TV like experiences through streaming video. WOW is a leading broadband Internet provider providing TV like broadcasts.[14]

Additional statistics about Internet Usage is listed below [12]:

Source: E-Living Website [12]

Source: E-Living Website [12]

Mobile internet users are usually more experienced, younger and heavy users. They would not replace pc users.

Individual