Babylon Ltd. (TASE:BBYL) notified the TASE this morning that Google Inc. (Nasdaq: GOOG) will not renew its agreement with the company, which expires on November 30, because of the large number of complaints that Google has received from users of its Chrome browser. The users claim that installing Babylon's browser harms their user experience, raising concern at Google about Babylon's ability to provide a positive user experience.
Babylon added that Google said that it might reconsider the decision in 2014.
Consequently, Babylon's share price was down 65% to NIS 7.05 in morning trading on the Tel Aviv Stock Exchange.
Babylon warned that the termination of the agreement would have a material effect on its revenue and profits, given that the Google agreement accounted for 43% of the company's revenue in the second quarter of 2013.
Google's notice follows Babylon's troubles with Yahoo! Inc. (Nasdaq: YHOO), which warned the company that if it did not immediately correct deficiencies in its product, it would suspend their agreement. Babylon says that it is working on the problem and that Yahoo has not yet suspended their agreement.
, "The events that Babylon has experience in the past few days are not only related to Babylon, but are industry-wide," said Babylon CEO Alon Carmeli in response. "As industry leaders, we are the first to be affected by the events to such a degree."
Carmeli added that he and Babylon controlling shareholder Noam Lanir were committed to the company. "We believe in the company and we're looking forward. Together with the company's employees, experience and knowhow, and despite the complex challenges, we will do the utmost, using all the means at our disposal to adapt the company to the new reality.
"Babylon has extensive knowhow, a track record, distribution and online monetization capabilities, and advanced technology about everything related to the Internet worlds and users. We're working to adapt to the new reality on the basis of these capabilities. We'll naturally continue to update investors on material developments on this matter."
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2013
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