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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 Q3 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 Q3 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. Internet Gold – Golden Lines - About Us… History • Founded in 1996 by Eurocom Communications Ltd. and Eli Holtzman • Within about three years became leading ISP in the Israeli market • Went public on NASDAQ in August 1999 and TASE on May 2005 Current business • 100% owns two subs: Smile.Communications Ltd. and Smile.Media Ltd. • Smile.Communications – specializes in Internet services & Int’l telephony • Smile.Media – specializes in e-Advertising, e-Commerce and paid content • ~ 720 Full-Time Employees

  4. Committed to growth…2007 - crossing the 250 M$ 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 us $ millions Organic CAGR = +20% M&A CAGR = +47% * post-merger

  5. Israel’s telecommunications market In US$ Billion 2005 total – US$ 5.3 B Source: Israeli MoC

  6. 2006/07: Leveraging Strong Positioning

  7. Value Added Services • Biz services • Hi level integration • Hi level data security • Dealernetwork • e-Media & e-Commerce • Global data networks • Roaming services • Call centers • Fixed domestic telephony • Pre/post paid cards • TDM platform 1 + 1 = 3 Multiple Synergies between the two companies

  8. Rationale for the 012 acquisition communications activities only In US$ millions Q4/2005 + Q1-3/2006 * F/Y - 2007** Total SCL * Based on IGLD estimate ** 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

  9. + = 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 International voice revenues for H1 2006 up 3% vs. H1 2005 (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.)

  10. 072 / 075 - additional growth driver Fixed telephony • Total fixed telephony market in Israel - US$ 1.2B 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.)

  11. * 2006/2007: Growth of Online Advertising continues Israel Internet Advertising CAGR = +38% Israel’s broadband penetration is among the highest in the world ~70% of Israeli households have Internet access ~ 95% are connected via broadband! >40% of users are online >10 hours per week. 2.7M users per day! Israel’s online ad budgets are low compared to exposure –ad budgets always follows rating Internet Advertising in Israel is currently > 6-7% of overall media spending (~ $900M in 05’) - growing fast SEARCH - additional growth potential: US search revenues - 40% of total e-Adv. much higher than in Israeli market in US$ millions * Q3/06 - Media market affected by war conditions Source: Market surveys & IGLD estimates US Internet Advertising CAGR = +21% in US$ billions estimated Source: PWC IAB Internet Advertising Report, Sept. ‘05 & company's estimates

  12. Smile.Media – Content & Portal Brands

  13. Leading e-Commerce Brands

  14. Two pure-play subsidiaries Quarterly Growth Revenues EBIT US$ in millions US& in millions

  15. Two pure-play subsidiaries Annual Growth * company’s goals US in millions Revenues EBIT ** Post merger IGLD’s estimate for 2006/07, excludes one time expenses relating to the merger ** Ebitda goal for 2007 ~ US$ M68 / estimate for finance exp. ~ US$ M10

  16. Balance sheet overview in US$ millions

  17. Comparables Interesting market opportunity… KCSA to send new slide

  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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