1

Investors presentation

October 2010

Any forecast and/or forecasting statement, included in this presentation, is

based on the Management's assessment at its discretion. However, these

forecasts and/or statements are based on the Company's expectations at the

time of this Presentation and do hold in store a number of uncertainties and

risk to consider.

It is important to emphasize that actual results may differ substantially from

expectations in these forecasts and/ or forecasting statements, resulting from

various factors. The Company does not make any representations regarding

the accuracy and achievement of the forecasts and/or forecasting statements.

In addition, forecasts and/or forecasting statements relate to the date of this

Presentation only and the Company is not under any obligation to update or

correct any of the forecasts and/or forecasting statements to reflect events or

circumstances after the date of this Presentation.

Noam Lanir (through Chanpak and Livermore Investments Group Ltd)

25%

Reed Elsevier Venture20%

Harel Insurance Investments & Financial Services Ltd

6%

Public44%

Shareholders

80,000,000 users and countingSee why

Making information relevantby

bridging the language gap

Helloשלום

Hola

The language Gap

ye

t

70% of Internet content

is in English

Only 30% of Internet users are native English

speakers

visitors to babylon web properties

3.5M unique visitors to Babylon web sites daily

Babylon – Leading the World of Languages

80,000,000 desktop installations

90,000,000 translation requests a day

Active in 231 countries 18,000,000 definition terms

Supporting 75 languages 3,500,000 new unique visitors a day 100,000 daily downloads

Business Card

• 100K installations a day

• A variety of products and services Translation software (Win./Mac/iPhone/iPad/BBerry)

Language learning (software/service)

English writing improvement software

Professional translation service

Free translation service

Online search service

Corporate information retrieval solution

• Business Model

Search Engine Marketing

Social Networks Marketing

Affiliate Program

Business Model

Software sales

Online store (monthly recurrent or perpetual)

Call Center (private users and SMB)

Agents (large organizations)

Advertising

Search revenue share

Display ads

Distribution

Revenues Breakdown ($ Millions)

Advertisement Call Center Store Organizations

Advertisement revenues

Advertisement monthly revenue

Advertisement revenue breakdown ($ Millions)

P&L ($ Millions)

P&L ($ millions)200720082009

Revenue 12.118.822.5

COGS2.02.42.4

Gross profit 10.116.319.8

R&D2.22.52.4S&M6.08.212G&A4.95.76.2

0.74.04.1

Stock-based compensation0.10.50.6

Operating profit0.63.53.5

Financing (expenses) income6.1(0.3)(0.1)

Profit Before Income Tax1.33.33.4

Tax benefit--1.6

Net profit 1.33.35.011%18%22%

Basic earnings per share ($) 0.030.080.12

20

30.06.10 Balance Sheet

• 2009 dividends – 8M$

• Cash and cash equivalents -10.5M$

• Equity - 14.9M$ (85% of Assets)

• No debt

21

Dank u شكرا Thank youתודה רבה

Alon Carmeli, CEOBabylon Ltd.

Tel Aviv Stock Exchange – BBYL, 1101666alon@babylon.comwww.babylon.com