Shares in Israel's Babylon dive as Google ends contract
JERUSALEM, Oct 30 (Reuters) - Israeli translation software provider Babylon saw its shares plunge more than 60 percent on Wednesday after announcing that Google did not plan to renew a cooperation agreement between the two companies.
The internet advertisement revenue-sharing deal with Google, set to end Nov. 30, was a major source of income for Babylon, accounting for 43 percent 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 percent 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 percent to 7.33 shekels, lowering its market value to 363 million shekels ($103 million) from 981 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.