NASDAQ NM / TASE - symbol: IGLD Eli Holtzman, CEO Doron Turgeman, CFO Q3 2006 Internet Gold Leading Israeli communications and Interactive media Group.

NASDAQ NM / TASE - symbol: IGLD

Eli Holtzman, CEODoron Turgeman, CFOQ3 2006

Internet GoldInternet GoldLeading Israeli communications Leading Israeli communications

and Interactive media Groupand Interactive media Group

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

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

Internet Gold – Golden Lines - About Us…

4

5

6

Committed to growth…2007 - crossing the 250 M$ revenue line

2006– Build-out of International

VoIP 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)

Primary drivers:

in us $ millions

284

92

41 50 67

0

50

100

150

200

250

300

2003 2004 2005 2006 2007Goal *

Organic CAGR = +20%

M&A CAGR = +47%

* post-merger

7

Israel’s telecommunications market

Cellular, $2.7

Multi-Channel TV, $0.7

ILD, $0.4

Fixed line & data, $1.2

Internet, $0.3

Source: Israeli MoC

2005 total – US$ 5.3 B

In US$ Billion

8

2006/07: 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

Start 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 11-14M $/yr savings

9

10

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

11

Rationale for the 012 acquisition

Revenues 71.8 155 226.8 261

EBIT 6.2 19 25.2 39-42***

EBITDA 12.7 33 45.7 61-65***

Employees 749 1,290 2,039 Synergy

Total

*Q4/2005 + Q1-3/2006

* Based on IGLD estimate

*** Communications’ EBIT / EBITDA goals for 2007 exclude one time expenses relating to the merger. These goals assumes full synergy of merger to be achieved Q2/07

F/Y - 2007**

** company’s goals for the 1st full year of merged communications operations

SC

L

communications activities onlyIn US$ millions

12

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 – growth driver for the communications industryInternational 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)

+ = cash generators

ILD, $0.4

13

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 - US$ 1.2B in 2005

012 currently have 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

072 / 075 - additional growth driver

Fixed line &

data, $1.2

14

15

2006/2007: Growth of Online Advertising

continues

16

67

10

12

0

2

4

6

8

10

12

14

16

18

2002 2003 2004 2005 2006*

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

US Internet Advertising CAGR = +21%

Source: Market surveys & IGLD estimates

Israel Internet Advertising CAGR = +38%

& company's estimates

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

16

Smile.Media – Content & Portal

Brands

Property IGLD’s ownership Description

msn-Israel

50.1% SML(49.9% MS Corp.)

Hebrew language portal Messenger, Hotmail Israel & MSN Search Israel

start 100% General portal & Search engine

nirshamim 100% Academic portal

zahav.ru 100% Russian language portal

V-games 100% Games content portal

seret 51% Cinema portal

yahala 51% Arab-language portal

TheMoney 75% Lead-generation financial

portal

tipo 52% Children’s portal

netex Search engine & directory

goop Exclusive marketing rights Youth portal

GPG e-Advertising network

17

Leading e-Commerce Brands

Property IGLD’s % Description

P1000 100%

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

msn shops 50.1%

e-Commerce ventures between MSN-Israel and retailers

dbook 50% Leading Bookstore

getprice 51% Israel’s #2 price comparison site

Paid content

marketing rights

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

18

19

3.0 3.7 4.0

13.5 15.417.8 18.1

20.5

3.2 4.0

16.718.4

21.5 22.124.5

Q3 05 Q4 05 Q1 06 Q2 06 Q3 06

Smile.media Smile.communications

Revenues

0.6 0.9 0.8

0.6 1.0

1.32.1

0.70.7

1.8

2.6

2.2

1.61.3

2.8

03 05 Q4 05 Q1 06 Q2 06 Q3 06

Smile.media Smile.communications

US$ in millions

EBIT

Quarterly Growth

US& in millions

Two pure-play subsidiaries

20

10 1233 40 55

76

261

168 23

284

41 5067

92

2003 2004 2005 2006* 2007**

Media Communications

Revenues

2 2 35 4 5 8

40

5

45

5 6 7 11

2003 2004 2005 2006* 2007**

Media Communications

US in millionsEBIT

Two pure-play subsidiaries

Annual Growth* company’s goals

** Ebitda goal for 2007 ~ US$ M68 / estimate for finance exp. ~ US$ M10

** Post merger

IGLD’s estimate for 2006/07, excludes one time expenses relating to the merger

21

Balance sheet overview

Total Cash 60.7

Current assets 84

Total assets 119.5

Current liabilities 22.9

Total liabilities 78

Working capital 61.1

Total shareholders’ equity 41.3

in US$ millions

22

ComparablesInteresting market opportunity…

KCSA to send new slide

as of Nov. 7, 2006 Q2/ Q3 2006

Company Internet Gold Sify Pacific Thestreet.com Sina.ComTicker IGLD Sify PCNTF TSCM SINAShare price $7.87 $9.08 $9.77 $8.61 $27.93

CommunicationsRevenues (M$) 20.4 26.5 27.9Operating Income (M$) 2.1 2.4 1.5Market cap (M$) N/A N/A 132.1 N/A N/Aprice to revenues multiple N/ A N/ A 1.2 N/ A N/ Aprice to EBIT multiple N/ A N/ A 22.4 N/ A N/ A

MediaRevenues (M$) 4.0 2.2 13.0 53.7Operating Income (M$) 0.6 0.1 2.6 7.6Market cap (M$) N/A N/A N/A 235.3 1,497.3price to revenues multiple N/ A N/ A N/ A 4.5 7.0price to EBIT multiple N/ A N/ A N/ A 22.8 49.0

TotalRevenues (M$) 24.5 28.7 27.9 13.0 53.7Operating Income (M$) 2.7 2.5 1.5 2.6 7.6Market cap (M$) 145.1 384.9 132.1 235.3 1,497.3price to revenues multiple 1.5 3.4 1.2 4.5 7.0price to EBIT multiple 13.4 38.5 22.4 22.8 49.0

23

24

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

25

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

26

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

Owns over 18 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 ~ US$ 11-14M 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!