Babylon (software)

Lore & Background

Babylon Ltd. was established in 1997 by Israeli entrepreneur Amnon Ovadia, who had begun a project for an online English–Hebrew dictionary in 1995. The company filed a patent for text recognition and translation in September 1997. By 1998, Babylon had two million users, mostly in Germany and Brazil, growing from 420,000 to 2.5 million users that year. Formula Systems, headed by Dan Goldstein, acquired Mashov Computers and became the largest shareholder. By 2000, the product had over 4 million users. In spring 2000, Babylon failed to raise $20 million in a private placement and lost NIS 15 million, with further stress from the dot-com bubble collapse. In 2001, the company continued losing money, costing its parent company Formula Vision NIS 4.7 million.

Babylon went public in February 2007 on the Tel Aviv Stock Exchange (TASE: BBYL1). Israeli

Reader's Guide

Babylon's significance lies in its dual legacy: it was an early, popular translation tool that offered convenient single-click access to dictionaries, currency conversion, and text-to-speech in multiple languages, with 36 proprietary dictionaries in 21 languages. However, its later years were defined by the Babylon Toolbar, which was widely classified as adware and a browser hijacker. Microsoft antivirus identified it as adware in August 2010, though it was reclassified after modifications. Download.com bundled the toolbar with open-source packages like Nmap, prompting an apology from the site's vice president. The toolbar changed users' home pages and search engines, and was listed as unwanted by anti-spyware software. Google's termination of the cooperation agreement in 2013 marked a turning point, after which Babylon no longer distributed toolbars or third-party software. The company is considered part of Israel's 'Download Valley,' a cluster of firms monetizing free software through adware. Its story illustrates the tension between utility and intrusive monetization in the software industry.

Did You Know?

• Babylon was named the seventh most popular website in Libya in 2011.
• In 2008–2009, Babylon reported earnings of NIS 50 million through its collaboration with Google.
• The Babylon Toolbar was identified as a browser hijacker that was very easy to install inadvertently and unnecessarily difficult to remove.
• Babylon's IPO took place in February 2007, ten years after the company was founded.

From a Reading-Friendly Dictionary to a Global Product

Babylon's story began in 1995 when Israeli entrepreneur Amnon Ovadia set out to build an online English-to-Hebrew dictionary that would let readers look up words without breaking their reading flow. Two years later, in 1997, Babylon Ltd. was formally established in Or Yehuda, Israel, and the first version of the software hit the market. On September 25 of that same year, the company filed a patent covering its text recognition and translation technology. The product caught fire almost immediately: within a single year of launch, the user base swelled from roughly 420,000 to 2.5 million, with Germany and Brazil emerging as the strongest markets. By 2000, more than four million people were using the tool. Yet the early euphoria was short-lived. In the spring of 2000, Babylon failed to close a twenty-million-dollar private placement and posted a fifteen-million-nishe loss. The broader dot-com collapse compounded the pain, and into 2001 the company kept bleeding cash, costing its parent Formula Systems an additional 4.7 million nise. Formula Systems, led by Dan Goldstein, had become the largest shareholder after acquiring Mashov Computers in 1998, and the financial strain tested that relationship.

A One-Click Linguistic Workbench

At its core, Babylon is designed around a single, frictionless interaction: a right-click on any word in any Windows application—Word, Outlook, Excel, Internet Explorer, or Adobe Reader—summons a small popup window displaying the translation or definition. The company holds a patent for this OCR-based text recognition, and a companion tool called Capture2Text extends the same one-click capture to browser environments. Beyond individual words, the software handles full-document and full-webpage translation, currency conversion, measurement conversion, and time-zone conversion, drawing on a database that spans more than 1,700 sources across over 75 languages. The linguistic backbone is substantial: Babylon's in-house team has produced 36 English-based proprietary dictionaries covering 21 languages, each containing between 60,000 and 200,000 terms, phrases, acronyms, and abbreviations. A morphological engine underneath recognizes inflected forms, prefixed variants, and multiple writing formats. Community-created dictionaries and glossaries add further depth, all indexed across 400 subject categories ranging from law and health to sports and entertainment. A built-in text-to-speech agent lets users hear correct pronunciation, and the entire dictionary collection is available to users at no extra cost.

Public Markets, Google Money, and a North African Audience

Babylon's path to public markets was neither smooth nor immediate. After the early-2000s financial struggles, the company eventually went public on the Tel Aviv Stock Exchange in February 2007 under the ticker BBYL. Israeli businessman Noam Lanir bought controlling interests for $10.5 million, sharing management with second majority shareholder Reed Elsevier and founder Amnon Ovadia. The turning point in revenue came through a partnership with Google: in 2008–2009, Babylon reported roughly 50 million nise in earnings from that collaboration, and in 2010 Google Ireland signed an extended agreement covering online search and pay-per-click advertising. The brand's international footprint was impressive—by 2011 the site ranked seventh in Libya, eighth in Algeria, and eleventh in Tunisia. In April 2012 the Babylon website held an Alexa ranking of 45, and Globes magazine reported that Lanir had booked a paper profit of about 200 million nise on his stake. A foreign private equity fund had even made an offer valuing the company at roughly 248 million nise, or about 70 million dollars. In October 2014, the translation business was acquired by Babylon Software Ltd., marking another chapter in the company's evolving corporate structure.

The Toolbar Scandal and the Loss of Google

Babylon's reputation took a severe turn between 2010 and 2013, when the company became widely associated with behavior that drew comparisons to malware. The Babylon Toolbar, bundled with Babylon and other third-party software, was repeatedly identified as a browser hijacker—extremely easy to install inadvertently yet notoriously difficult to remove. On August 7, 2010, Microsoft's antivirus products classified the application as adware under the label 'Adware: Win32/Babylon,' citing potentially intrusive behavior. Sixteen days later, on August 23, Microsoft announced that Babylon Ltd. had modified the program in response. The controversy placed Babylon squarely within what is sometimes called Israel's 'Download Valley,' a cluster of software firms that monetize free downloads through bundled adware. The damage to trust proved lasting: in 2013, Google terminated its commercial agreement with Babylon Ltd., cutting off the search and advertising revenue stream that had been a major pillar of the company's finances. The episode remains the defining stain on an otherwise ambitious translation platform.