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NASDAQ NM / TASE - symbol: IGLD

Internet Gold Leading Israeli communications and Interactive media Group. NASDAQ NM / TASE - symbol: IGLD. Eli Holtzman, CEO Doron Turgeman, CFO Q2 2006. Forward-Looking Statement.

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NASDAQ NM / TASE - symbol: IGLD

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  1. Internet Gold Leading Israeli communications and Interactive media Group NASDAQ NM / TASE - symbol: IGLD Eli Holtzman, CEO Doron Turgeman, CFO Q2 2006

  2. Forward-Looking Statement The statements contained herein that are not purely historical are forward-looking statements. These forward-looking statements, and especially those regarding the 012 merger, involve risks and uncertainties and actual results could differ materially from the results discussed in these statements.

  3. Committed to growth…2007 - crossing the 1B NIS revenue line Primary drivers: • 2006 • Build-out of InternationalVoIP Telephony services • Expansion of InternetAdvertising • Expansion of BusinessServices • 012 acquisition to be completed and operations to be consolidated - Q4/06 2007 • 1st full year of the merged operation • Continued growth expected in all lines of business (under both ‘smile’ and ‘012’ brands) in NIS millions Organic CAGR = +20% M&A CAGR = +47%

  4. Israel’s telecommunications market 2005 – NIS 23.2 B Source: Israeli MoC

  5. 2006/07: riding the expansion of our marketsto the next level of revenues and profits

  6. Value Added Services Biz services Hi level integration Hi level data protection Dealernetwork e-Media and e-Commerce Global data networks Roaming services Call centers Fixed domestic telephony Pre/post paid cards TDM platform 1 + 1 = 3 !!Perfect synergy between the two companies

  7. * Rationale for the 012 acquisition & merger * communications activities only H1/2006 2007** Total SCL * Based on IGLD estimate –NIS in millions ** company’s goals for the 1st full year of merged communications operations *** Communications’ EBIT / EBITDA goals for 2007 exclude one time expenses relatingto the merger. These goals assumes full synergy of merger to be achieved Q2/07

  8. + = cash generators !! ILD –growth driver for the communications industry International voice traffic from Israel - up 10.3% in 2005 vs. 2004 - up 12% in H1/06 vs. H1/05 (Source – Israeli MoC) Leveraging state of the art telephony infrastructure To drive further growth • Most sophisticated VoIP platform • World class TDM platform • Auxiliary platforms (anti-fraud / billing / CRM etc.)

  9. 072 / 075 - additional potential growth driver Fixed telephony • Total fixed telephony market in Israel - NIS 5.3B in 2005 • 012 currentlyhave only ~ 13k subscribers’ lines • Our goal ~ 5% market share of this significant segment within 3-4 years • Future marketing to rely on existing customer base of ~ 800 k subscribers State-of-the-art telephony infrastructure • Solid investment in class 5 fixed telephony • No further significant investments required • Auxiliary platforms (anti-fraud / billing / CRM etc.)

  10. * 2006/2007: Growth of Online Advertising continues US Internet Advertising CAGR = +22% “Marketers are shifting more of their advertising budgets online… As consumers spend a larger percentage of their media time online, it is natural for the flow of advertising dollars to follow.” David Silverman, Partner, PricewaterhouseCoopers LLP “Almost half of all marketers plan to increase online ad spending by decreasing spending in other channels…”Forrester Research in US$ billions estimated Source: PWC IAB Internet Advertising Report, Sept. ‘05 & company's estimates Israel Internet Advertising CAGR = +40% in US$ millions Source: Market surveys & IGLD estimates * Q3/06 - Media market affected by current war conditions

  11. Israeli Online Advertising is ripe for growth

  12. Smile.Media – diversification

  13. Israel’s e-Commerce market will follow the growth pattern of online advertising, and IGLD is positioned to benefit

  14. Two pure-play subsidiaries Quarterly Growth Revenues EBIT NIS in millions NIS in millions

  15. Two pure-play subsidiaries Annual Growth * company’s goals NIS in millions Revenues EBIT IGLD’s estimate for 2006/07, excludes one time expenses relating to the merger ** Ebitda goal for 2007 ~ 300 / estimate for finance exp. ~ 45

  16. Balance sheet overview in NIS millions * Including cash and cash equivalents of NIS 257.5 million attributable to the 012 acquisition.

  17. Comparables Interesting market opportunity…

  18. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1996 Goal: to become Israel’s Leading Full Suite Alternative Service Provider IPTV IP seamless mobility VoWi-Fi / Wi-MAX VoB & business integration Technology Value added services e-Commerce & paid content Portals & e-Advertising International Long Distance (ILD) & Internet Access

  19. Strong Shareholders / Dedicated Management • Public ~ 31% • Eurocom Communications ~ 69% • Focused, communications-oriented controlling parent group • Leading Israeli private communications group representing exclusively Nokia, Panasonic, GE and more • Also holds equity in radio stations, DBS TV service provider, satellite communications, cellular and more • Closely-knit, results-oriented management team • Most all level of management grows from within • Experienced upper level management

  20. Investment highlights Thank you!

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