In 1988, on the basis of Shamir's smart card technology, DataCom was established as a partnership between Yeda Research & Development Co. and News Corporation, which invested $5 million in the company. In 1988, the company was renamed News DataCom Research, and additional investors joined. The company signed a contract with BSkyB, in which News Corp. had a 35% stake, for the development of an encryption system. The company was established in Har Hotzvim in Jerusalem, as it received tax benefits from the Israeli government for being based in Jerusalem.