NASDAQ GM / TASE – 100 Index- symbol: IGLD Eli Holtzman, CEO Doron Turgeman, CFO Q1 2007 Internet Gold Leading Israeli communications and Interactive media.

NASDAQ GM / TASE – 100 Index- symbol: IGLD

Eli Holtzman, CEODoron Turgeman, CFOQ1 2007

Internet GoldInternet GoldLeading Israeli communications Leading Israeli communications

and Interactive media Groupand Interactive media Group

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.

History April 1992 - Euronet Golden Lines emerges as Eurocom

Communications services subsidiary (Information/Satellite/Int’l comm. Services)

January 1996 – commence ISP service

August 1999 – leading Israeli ISP. Public on NASDAQ

2000 – subsidiaries - GoldMind / GoldTrade / IGI / MSN Israel

Q1 2000 – signed partnership with MS / April 2000 – msn Israel is up

Mid 2001 – turn & remain profitable / growth throughout almost all Q’s

August 2004 – ILD service is launched with 015

April 2005 – Dual listed on TASE (Dec. 06 – enters TA100 index)

January 2006 – re-org & re-brand to Smile - GT => SCL / GM => SML

August 2006 – acquisition of 012 Golden Lines from the Fishman Group

December 31st 2006 – 012 deal closing. Actual merger starts

Corporate Structure

Committed to growth…2007 - crossing the 1B NIS revenue line

2006– Build-out of International

VoIP Telephony services– Expansion of Internet

Advertising– Expansion of Business

Services – 012 acquisition completed

Dec. 31 2006. operations to be consolidated – Q1/07-Q4/07

2007– 1st full year of the merged

operation– Continued growth expected in

all lines of business (under both ‘smile’ and ‘012’ brands)

Primary drivers:

in NIS millions

1,250

408

177 216 289

0

200

400

600

800

1000

1200

1400

2003 2004 2005 2006 2007Goal

Organic CAGR = +26%

M&A CAGR = +63%

Israel’s telecommunications market

Cellular, ₪ 11.9

ILD, ₪ 1.6

Channel TV, ₪ 3.1

Fixed line & data, ₪ 5.3

Internet, ₪ 1.3

Source: Israeli MoC

2005 – NIS 23.2 B

Competition

Market is rough on new entrants & small players ILD – x-fone 018 / Netvision’s 017 and also 015 ISP – many micro ISP’s who never expanded

* Partner is the only independent cellular player / Eurocom was a co-founder / excellent working relations

Internet Access (k subs)

Internet VAS Residential

Internet Business

e-Advertising (US$ M’)

e-Commerce (US$ M’)

DATA

ILD (m’ $) incl. hubbing

Fix telephony (VOB)

Cellular *

Multi Channel TV

Radio stations

Residential Comm. Equip.

Satellite services

Relative strength

Smile Group

Related companies

Leveraging Strong Positioning

Access Services

Major market share in a stable market

Stronger emphasis on biz sector

VoIP/VOB/TDM Telephony

Two strong brands to drive growth in market share

Commercial penetration of domestic VoB

Online Advertising

We expect our advertising revenues will grow as media budgets continue to shift to the Internet

Efficient merger

1 + 1 = 3…

Significant savings on opex / capex

Efficient management of the two brands

Conservative estimation of 50-60M NIS/yr savings*

*Run-rate following completion of operational merger

1 + 1 = 3

Multiple Synergies between the two companies

Global data networks Roaming services Call centers Fixed domestic

telephony Pre/post paid cards TDM platform

Value Added Services Biz services

Hi level integration

Hi level data security

Dealer network e-Media & e-

Commerce

The Merged Company: A Communications

Powerhouse

Revenues280.6238.317.6%1,150

EBIT **3722.763%175-185

EBITDA **59.643.437%255-265

Employees(March 31)

1,6592,039Synergy

Q1 2007 F/Y - 2007*

* company’s goals for the 1st full year of merged communications operations** Non-GAAP EBIT & EBITDA - excluding non-cash amortization with respect to the 012 acquisition.*** 2006 figures are on a pro-forma basis

communications activities only

In NIS millions

Q1 2006 %YoY

+

***

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.)

ILD – growing in volume and revenue terms

International voice traffic from Israel - up 9.1% in 2006 vs. 2005(Source: Israeli MOC)

International voice revenues for H1 2006 up 3% vs. H1 2005(Source: IDC)

012 - cash generator

ILD, 1.6 ₪

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.)

Fixed telephony Total fixed telephony market in Israel - NIS 5.3B in 2005 SCL received a VOB license during February 2007.

012 currently have only ~ 17k subscribers’ lines Our goal ~ 5% market share of this significant segment within 2-3

years Future marketing to rely on existing customer base of ~ 800 k

subscribers

072 - additional growth driver

Fixed line & data, 5.3 ₪

2006/2007: Growth of Online Advertising

continues

19

17

67

1012

02468

101214161820

2002 2003 2004 2005 2006 2007*

Source: PWC IAB Internet Advertising Report, Sept. ‘05

US Internet Advertising CAGR = +26%

Source: Market surveys & IGLD estimates

& company's estimates

Israel Internet Advertising CAGR = +48%

85

50

36

2212

65

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007

*

* Q3/06 - Media market affected by war conditions

in US$ billions

in US$ millions

estimated

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 ratingInternet 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

Smile.Media – Content & Portal

BrandsPropertyIGLD’s

ownershipDescription

msn-Israel50.1% SML(49.9% MS Corp.)

Hebrew language portal Messenger, Hotmail Israel & MSN Search Israel

start100%General portal & Search engine

nirshamim100%Academic portal

zahav.ru100%Russian language portal

V-games100%Games content portal

TheMoney100%Lead-generation financial portal

tipo52%Children’s portal

seret51%Cinema portal

yahala51%Arab-language portal

Radius100FM50%Leading Israeli radio station

portal

SML NetworkExclusive

marketing rights

E-advertising network in 4 portals

netexSearch engine & directory

goopYouth portal

Leading e-Commerce

Brands

PropertyIGLD’s %Description

P1000100%

One of Israel’s top 4 e-Commerce sites

Outlet for >100 of Israel’s largest consumer product suppliers

Growing revenues, positive EBIT Low-risk commission model with

fulfillment directly from suppliers

LMT50% Leading Israeli on-line travel site

getprice51%

Leading Israeli price comparison site

dbook50% Leading Bookstore

Paid content

marketing rights

Online magazines, newsletters, recruitment & jobs search and other content services

14.4 16.1 16 18.8 20.1

78.4 79.7 87.9 97

280.692.8 95.8 103.9 115.8

300.7

Q1 06 Q2 06 Q3 06 Q4 06 Q1 07

Media ** Communication

Revenues

4 3.3 2.8 3.4 3.5

5.7 8.2 9 10

35.8

9.7 11.5 11.8 13.4

39.3

Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 *

Media ** Communication

NIS in millions

EBIT

Quarterly Growth

NIS in millions

Two pure-play subsidiaries

** Presented on carve-out basis with respect to group’s reorganization

* Non-GAAP EBIT - excluding non-cash amortization with respect to the 012 acquisition.

150

1,100

65463225

343243

184153

1,250

177 216289

408

2003 2004 2005 2006 2007*

Media *** Communications

Revenues

1410322

7

21 18 19 32

163

185**

24 25 2946

2003 2004 2005 2006 2007*

Media *** Communications

NIS in millions EBIT

Two pure-play subsidiaries

Annual Growth

* Ebitda goal for 2007 ~ 300 / estimate for finance exp. ~ 40

*** Presented on carve-out basis with respect to group’s reorganization

**Non-GAAP EBIT - excluding non-cash amortization with respect to the 012 acquisition.

Balance sheet overviewAs of March 31,2007

Total assets1,455

Total liabilities1,178

Total shareholders’ equity277

in us$ millions

Total Debt Short-term366

Total Debt Long-term436

Total finance Debt (including NIS 165M convertible bonds)

802

ComparablesInteresting market opportunity…

KCSA to send new slide

As of May. 18 2007

Q1 07/ Q4 06

Ticker IGLD Sify PCNTF SINA SOHU IIJIShare price $14.36 $8.36 $9.91 $37.00 $25.00 $7.67

CommunicationsRevenues (M$) 67.4 30.1 49.2 114.2

EBITDA 14.1 2.1 3.4 17.2Market cap (M$) N/A N/A 134.0 626.8price to revenues multiple N/ A N/ A 0.7 5.5price to EBITDA multiple N/ A N/ A 9.7 36.5

MediaRevenues (M$) 4.9 2.9 56.4 33.1EBITDA 1.1 0.2 13.3 6.2Market cap (M$) N/A N/A 2,017.9 917.1price to revenues multiple N/ A N/ A 8.9 6.9price to EBITDA multiple N/ A N/ A 37.9 147.2TotalRevenues (M$) 72.3 33.0 49.2 56.4 33.1 114.2EBITDA 15.3 2.3 3.4 13.3 6.2 17.2Market cap (M$) 298.7 354.4 134.0 2,017.9 917.1 626.8price to revenues multiple 1.0 2.7 0.7 8.9 6.9 1.4price to EBITDA multiple 4.9 38.5 9.7 37.9 36.8 9.1

Goal: to become Israel’s Leading Full

Suite Alternative Service

Provider

Technology Value added services

VoB & business integration

VoWi-Fi / Wi-MAX

IP seamless mobility

IPTV

e-Commerce & paid content

International Long Distance (ILD) & Internet Access

Portals & e-Advertising

20091997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081996

Strong Shareholders / Dedicated Management

Public ~ 42% (updated May 20, 2007)

Eurocom Communications ~ 58% 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

Investment highlights

Leading Communications Group

Today: controls 1/3 of its markets with a continuously growing market share

Tomorrow: entering new markets

Positioned to lead rapidly growing media markets

over 30 portals & e-Commerce sites

High rate of market growth

Working from strong cash generating platform

All activities in both companies are major cash generators

Merger anticipated to save ~ NIS 50-60M in exp/inv

No difficulty in servicing loan (fin. exp. ~15% of Ebitda)

Proven management & ownership

Both company's management teams, working together with Eurocom (as controlling shareholder), have proven capable of carrying out aggressive growth / leadership strategies

Thank you!