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NASDAQ NM / TASE symbol: IGLD

Leveraging Israel’s Broadband Phenomenon. Eli Holtzman, CEO Doron Turgeman, CFO March 2006. Internet Gold Leading Israeli IP Group. NASDAQ NM / TASE symbol: IGLD. Forward Looking Statement.

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NASDAQ NM / TASE symbol: IGLD

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  1. LeveragingIsrael’s Broadband Phenomenon Eli Holtzman, CEO Doron Turgeman, CFO March 2006 Internet Gold Leading Israeli IP Group NASDAQNM / TASE symbol: IGLD

  2. Forward Looking Statement The statements contained herein that are not purely historical are forward-looking statements. These forward-looking statements involve risks and uncertainties and actual results could differ materially from such results discussed in these statements.

  3. IGLD’s smile brand: major presence across allInternet-related business sectors

  4. in NIS millions up 36% up 22% 2005: another year of strong revenue growth Primary drivers: • ’03 / ’04 • Mass Broadband Deployment • Launch of int’l telephony • 2005 • Build-out of InternationalVoIP Telephony services • Expansion of InternetAdvertising • Expansion of BusinessServices • Successful re-branding will contribute to future profitability

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

  6. Investment highlights

  7. IGLD’s next major growth driver

  8. 2005: the inflection point for Online Advertising US Internet Advertising CAGR = +19% +25% “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 +53% +22% Source: PWC IAB Internet Advertising Report, Sept. ‘05 Israel Internet Advertising CAGR = +43% +39% +63% +83% Source: Market surveys & IGLD estimates

  9. Israeli Online Advertising is ripe for growth

  10. messenger search hotmail IGLD’s anchor media property: Israel • Joint venture - IGLD (50.1%) & Microsoft Corp. (49.9%) • Strong, productive sales force • Perfect synergy between Microsoft’s technology and brand,and IGLD’s sales capabilities and local knowledge • Strong user statistics: • 4M unique users per month • 160M page views • Massive usage of tools • Co-operations with recognized global and regional brands on content-branded channels (Coca Cola / P&G and more) jobs

  11. IGLD - positioned to benefit

  12. Israel’s e-Commerce market will follow the growth pattern of online advertising… Source: CIA & Gaon Capital Markets & IGLD estimates

  13. …and IGLD is positioned to benefit

  14. Smile media: ~ 22% of Israeli market (NIS millions)

  15. A Strong & Consistent Revenue Generator

  16. While ISP residential business has leveled off, biz revenues & VAS sales continue to grow residential • Anti-spam & anti-virussolutions • WiFi home networking • e-Safe Secured Internet Access (server-based) smile.biz services • Professional serviceslarge-scale infrastructure projects and 24/7 outsourcing services • Specialized content • Website hosting • Co-location development • Web security • Global roaming • Training

  17. Pioneers of VoIP Telephony in Israel Smile.015 - an alternative provider • Existing customer base ~ 300k residential + 5000 business users • Brand capital • Leveraging existing operations / services / tech infrastructure • Effective / low cost investment in VoIP technology Smile.075 – the additional home line • Rely on existing switches and tech platform • Lower investment required (~$300,000 - $500,000) • State of the art services at lower / flat costs

  18. Stable and profitable performer (NIS millions) * * * EBIT for Q3/04 and Q4/04 reflects investment of NIS 8.5M to launch 015 business Towards end of Q4/04 this activity broke even and it is already contributing positively to our EBIT

  19. Strong balance sheet • 18 consecutive quarters of positive net cash flow from operations • Current ratio: 3.7 • Return on Equity (ROE): ~12% for FY2005 ($4M profit / $32.3M equity) • Shareholders’ equity: 30% of total balance sheet • $55 million net cash reserves • Strong cash flow from operations: $3M in Q4 05 • Low credit risk: most receivables covered by credit cards or standing bank orders

  20. Comparable media players Interesting market opportunity…

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

  22. Investment highlights thank you

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