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Babylon Plunges to 8-Month Low on Google Report: Tel Aviv Mover

Babylon Ltd. (BBYL) plunged to the lowest level since April as Calcalist reported Google Inc. (GOOG)’s new toolbar policies may hurt Israeli providers of free online software.

Shares of Babylon, a maker of translation software, fell as much as 11 percent and lost 9.2 percent to close at 22.22 shekels, the lowest since Apr. 19, at 4:30 p.m. in Tel Aviv. The benchmark TA-25 stock index declined 0.9 percent.

Babylon, which in November filed to sell shares on the Nasdaq stock exchange, has more than doubled this year as net income increased due largely to an advertising revenue-sharing agreement with Google, the most-used Internet search engine. Calcalist reported today companies such as Babylon and Perion Network Ltd. (PERI) may see a negative impact from Google’s effort to keep companies from stealthily adding options to users’ toolbars when they download software.

“With investors hoping to hear about a possible IPO, any change to the existing relationship with Google, its main source of revenue, is crucial,” said Sharon Naveh, head of the international sales desk at Migdal Capital Markets Ltd. “The Google partnership is a really big deal for investors.”

Babylon CEO Alon Carmeli said in an interview with Bloomberg Dec. 10 that the company hasn’t announced any changes to its initial public offering plans. The Or Yehuda, Israel- based company said Nov. 25 it planned to start a roadshow for the potential U.S. sale in early 2013, later than some investors anticipated, fueling concerns the share issue may be canceled.

Shares of Tel Aviv-based Perion, a digital media services provider, fell 7.4 percent, the most since November 2011, with almost four times the three-month average daily volume traded.

To contact the reporter on this story: David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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