1. 1 Investors presentation October 2010

2. 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.

3. Noam Lanir (through Chanpak and Livermore Investments Group Ltd) 25% Reed Elsevier Venture20% Harel Insurance Investments & Financial Services Ltd6% Public44% Shareholders

4. 80,000,000 users and counting See why

5. Making information relevant by bridging the language gap Hello שלום Hola

6. The language Gap yet 70% of Internet content is in English Only 30% of Internet users are native English speakers

7. visitors to babylon web properties 3.5M unique visitors to Babylon web sites daily

8. 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

9. 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

10. Search Engine Marketing

11. Social Networks Marketing

12. Affiliate Program

13. 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

14. Revenues Breakdown ($ Millions) AdvertisementCall CenterStoreOrganizations

15. Advertisement revenues

16. Advertisement monthly revenue

17. Advertisement revenue breakdown ($ Millions)

18. P&L ($ Millions)

19. P&L ($ millions) 2009 2008 2007 22.518.812.1 Revenue 2.4 2.0 COGS 19.816.3 10.1 Gross profit 2.42.52.2 R&D 128.2 6.0 S&M 6.25.74.9 G&A 4.1 4.0 0.7 0.60.50.1 Stock-based compensation 3.5 0.6 Operating profit (0.1)(0.3)6.1 Financing (expenses) income 3.4 3.31.3 Profit Before Income Tax 1.6 -- Tax benefit 5.03.31.3 Net profit 22% 18%11% 0.120.080.03 Basic earnings per share ($)

20. 20 30.06.10 Balance Sheet 2009 dividends – 8M$ Cash and cash equivalents -10.5M$ Equity - 14.9M$ (85% of Assets) No debt

21. 21 תודה רבהThank you شكرا Dank u Alon Carmeli, CEO Babylon Ltd. Tel Aviv Stock Exchange – BBYL, 1101666 alon@babylon.com www.babylon.com