Babylon Ltd. (BBYL) advanced to the highest level in more than a month on bets the Israeli software maker’s new Internet advertising revenue-sharing agreement with Yahoo! Inc. (YHOO:US) will boost sales.
Shares of the company, which has a similar relationship with Google Inc., jumped 3.9 percent to 22 shekels, the highest intraday level since March 17, at 12:35 p.m. in Tel Aviv. Volume on the stock was 40 percent above the 15-day moving average. Babylon’s shares were the second-biggest gainers in percentage terms on the TA-100 Index, which added 0.2 percent.
Babylon, based in Or-Yehuda, Israel, rose for a fifth day after saying today that it signed a four-year accord with Yahoo to share revenue from on-line advertising, including mobile Internet. The company expects the agreement to make a “significant contribution” to business, according to a filing today with the Tel-Aviv Stock Exchange.
“The four-year accord significantly lowers the risk for the company,” Beni Dekel, an analyst at Union Bank of Israel Ltd., said by phone today. Dekel upgraded the company to “buy” on April 18. “For the first time the company will get a percentage of revenues from advertising as opposed to just a fixed amount per user and the accord opens up a new mobile market.”
Babylon’s stock, which more than doubled last year, fell 25 percent in the two-month period ending March 31 on concern that a change in the company’s relationship with Google will hurt revenue. Google contributed 83 percent to Babylon’s 2012 sales, a company filing showed in February.
“I wouldn’t be surprised if by the end of the year Yahoo will be Babylon’s main customer,” Dekel said.
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