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TWST: Could we begin with a brief historical sketch and overview of Internet Gold (NasdaqSC: IGLD)?

Mr. Holtzman: Internet Gold is an Israeli Internet service provider. We started up in early 1996, when the Internet market in Israel was perhaps two years old and there were something like two dozen competitors. Most of them have disappeared. One survivor of that shakeout is our biggest competitor, but Internet Gold came in with, and today maintains, a fresh view on the market. During those early times in 1996, the Internet in Israel was highly technology oriented, the connection was a complicated one, and the strategies of the companies involved were very technical. We came in with a customer-oriented approach, with a friendly logo, and the brand caught on. We grew quite rapidly and things looked quite positive. In August 1999, with the capital market’s rising wave of interest in the Internet field, we successfully IPOed on Nasdaq. Today, we hold approximately 30% of the Israeli market, and I believe we are the largest Israeli player. We provide our customers with the full variety of Internet connections, platforms, narrowband, broadband. We cater to business as well as the home environment. In addition to subscriber services, both connectivity and value-added services, we have two main subsidiaries that complete our offerings to our customers. One is MSN Israel. Internet Gold holds 50.1%, so we control the company, and 49.9% is held by Microsoft Corp. MSN Israel was the leading portal in April 2002, which was the most recent month when AC Nielsen had a panel here and was reporting about the Israeli market. We believe we still lead the market in terms of unique audience and unique page views. The company is quite successful: We believe that by the end of this year MSN will break even and start to generate income. Internet Gold’s other subsidiary is GoldTrade. It is known in the Israeli market for the P1000, an e-commerce company that sells a big variety of goods and services to Israeli subscribers, mainly through Internet auctions. This method of e-commerce is quite successful in Israel. Internet Gold’s three companies operate as a synergistic group proving Israeli subscribers with both connectivity and value-added services, content and e-advertising and e-commerce.

TWST: With a significant percentage of the market, what are your plans for growth?

Mr. Holtzman: Value-added services are a key focus for Internet Gold. We already offer some very interesting value-added services to our subscribers and we have some more under development. Each VAS adds a few dollars – from 4 to 7 – per month per subscriber. Another avenue is, of course, broadband technology, which is growing in Israel. Right now, we have about 20% of the broadband market and we hope to be around the 25% mark toward the end of this year. So that’s another growth generator. And we also have the subsidiaries. MSN has something like a quarter-million regular users of Hotmail in Israel. In mid-July, Hotmail in the U.S. started charging subscribers about 19 a year for premium services. If they wish to stay with hotmail.com with a minimum of about two megabytes of e-mail and with other limitations, they can do it; but if they wish to be able to forward their mail to every other address, to save messages, to save mail for more than 30 days without having it erased, then they must pay 19 a year, a nominal amount for the average user. We intend to implement this program toward the end of this year. We also intend to start selling anti-virus and other value- added services, which I believe will all promote growth for the company. Even though there is a slowdown in the growth rate of Israelis joining the Internet, I believe the market still can grow.