Last update - 02:06 17/10/2007
Babylon rejects NIS 120m acquisition offer, says CEO
By Roy Peleg
Babylon has turned down a takeover offer based on its market cap, NIS 120 million, says CEO Dov Peer. He said that the translation software firm felt that a sale was not negotiable at that price.
Peer believes that the Israeli market has yet to recognize Babylon's potential, and that the firm is traded well below its real value. "A company with as much Internet traffic as we do, and with more than 600,000 downloads monthly, is a rarity in Israel," he said.
Babylon, established in 1997, offers its product as a freeware translation from English to other languages. In 2001, after the high-tech bubble burst, the company abandoned its advertisement-based business model and began selling its product. Since then, the company says, tens of millions of users have tried the software. More than 37 million in 170 countries currently use the trail version available for one month's use free of charge. The company notes about 1 percent of all trial users chose to purchase the full version.
Babylon faces a problem of software piracy, but Peer is unperturbed. "Pirating of software has always existed, and does today," he says. "It's something we never will be able to totally prevent. The millions of illegal users who work with the software understand its value, and in the end, after we identify their copy as an illegal one and block their access to service, they go out and buy a license for legal use." Babylon's 2005 revenues totaled about $6 million, and grew to $8 million in 2006.