Babylon shares dive as Google ends deal
Israeli translation software provider sees its shares plunge more than 60% after announcing that Internet search giant does not plan to renew advertisement revenue-sharing agreement between two companies
The Internet advertisement revenue-sharing deal with Google, set to end November 30, was a major source of income for Babylon, accounting for 43% of its second-quarter revenue of $45 million.
Babylon's stock price had already been suffering since the company announced last week that Yahoo, which provided 32% of revenue in the same period, had found faults in the way its own agreement was being handled.
"We are still assessing the situation and examining the implications and the company's operation alternatives," CEO Alon Carmeli said in a statement to the Tel Aviv Stock Exchange.
"It is too early to give one estimate or another on the full impact of the events and the course of action Babylon will choose to take," he said.
Babylon's shares fell 63% to NIS 7.33 ($2.08), lowering its market value to NIS 363 million ($103 million) from NIS 981 million ($278 million) on Tuesday.
Google decided not to renew the contract after receiving a large number of complaints that Babylon's software did not work well with the Google Chrome browser, Babylon said, adding that the internet giant could rethink the decision in 2014.
