Translation software developer Babylon Ltd. (TASE:BBYL) continues to leverage its business through collaborations with US Internet giants. The company, which is controlled by Noam Lanir, has signed a collaboration agreement with AOL under which it will provide AOL Latino with free Web-based translation tools, letting users translate content from one language to another directly on the AOL Latino website. The agreement enables users to translate content from English to Spanish, Portuguese, Italian, German and French and vice versa.
In the US, AOL Latino is one of the top 2 bilingual portals aimed at Hispanics, with more than 2.1 million unique users.
The agreement with AOL is a material one for Babylon for two reasons. The first is the Israeli company's desire to diversify its revenue sources in search-based advertising. At present, Google, Babylon's lead partner in this business, accounts for 20% of the company's revenue. Babylon is seeking to reduce its dependence on one partner, so the agreement with AOL represents a significant development in this direction.
The other reason has more to do with marketing than financial considerations in the sense that AOL chose Babylon even though it could have procured the same service from Google Translate.
In the first nine months of the year Babylon recorded NIS 47.8 million, with the annual contribution by the collaboration with Google now running at an annual rate of NIS 14 million. The company is currently traded at a market cap of $40 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2008
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