Babylon tumbles following revenue warning

Yahoo! has not suspended its Babylon agreement despite the deficiencies but the online translation company's revenue will fall.

The Babylon Ltd. (TASE:BBYL) Yahoo! Inc. (Nasdaq: YHOO) saga continues. This morning online translation company Babylon reported that its management had met with Yahoo's management and that details regarding the infringements found in the agreement were relayed to Babylon. Babylon told Yahoo! about the infringements that remain and what is happening regarding its business partners.

According to its announcement, Babylon will act in the coming days to monitor and locate additional deficiencies and report back with a summary of its findings. After the monitoring and locating of deficiencies has been completed, Yahoo! will assess the situation and reach its conclusions.

Babylon said, "For reasons of caution and to be certain that there are not additional deficiencies, Babylon has significantly reduced (about 70%) its investment in buying new users a fall which will translate into a fall in revenue."

The bottom line. However, is at this stage Yahoo! has not suspended its agreement with Babylon.

Nevertheless, Babylon's share price fell 16.5% this morning to NIS 20.07.

Published by Globes [online], Israel business news - - on October 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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