Trouble in Any Language: Babylon Stocks Plunge After Being Ditched by Google

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Disaster has struck in Babylon, whose officials reported Wednesday morning that Google will not be renewing its contract with the company. This comes at a time when Babylon’s contract with Yahoo is also in danger. “This will have a substantial effect on the company’s revenue and profits,” a company spokesman said this morning. Following the announcement, the price of Babylon stock plummeted by 60 percent.

Officials at ironSource, a software company that was to merge with Babylon according valuation of NIS 4 billion, say they were surprised to learn that Google had cancelled its contract with them. “Nobody told us. This is a public company,” said Tomer Bar Zeev, ironSource’s founder and CEO. “It shouldn’t have any effect on us.” Bar Zeev refused to give any further comment on this morning’s announcement from Babylon.

The contract between Babylon and Google will be ending on November 30, 2013. According to the contract, Babylon includes a Google search bar in the toolbar it gives its customers. A large chunk of its revenue comes from the royalties Google pays it for every search. In the last quarter, Babylon’s contract with Google made up roughly 43 percent of its total income.

Babylon officials said that Google decided to end the contract because many users of its browser, Google Chrome, complained that installing Babylon’s toolbar hurt their user experience, raising concerns at Google about providing a positive user experience. Still, Google officials said that they might reconsider the decision sometime in 2014

Alon Carmeli, Babylon's CEO.Credit: David Bachar

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