PETACH TIKVA, Israel, November 15 /PRNewswire-FirstCall/ -- Internet Gold, (NASDAQ:IGLD)(TASE:IGLD) today announced that smile.media ltd., its fully-owned subsidiary, has signed an agreement with Teddy Productions, one of Israel's leading entertainment production groups, to establish an internet video company. The new company will establish an Israeli internet video portal and will produce a broad range of internet video programs. smile.media will hold 50.1% of the new company and the owners of Teddy Productions will hold the remaining 49.9%. Teddy Productions is owned by Tmira and Dudu Yardeni, who for the past three decades have been pioneering leaders of Israel's entertainment and media industries. Today, Teddy Productions produces a variety of television/media programs and live events. It also has exclusive relationships with leading Israeli artists and pop-media talents. "We are excited to partner with Teddy Productions to benefit from the exciting internet video phenomenon," said Eli Holtzman, Internet Gold's CEO. "Throughout the world, internet video is attracting huge audiences and commanding a growing portion of internet media budgets. The Israeli market, with more than 95% of all Internet users hooked up via broadband, is ripe for this cutting-edge entertainment format. We believe that leading video sites will become a fertile source of revenues over the next few years as larger portions of advertising budgets are being shifted from traditional off-line media to the internet. Our strategic plan is to develop a wide variety of unique video content which will be promoted in synergy with our broad range of e-media properties to achieve leadership in this important and growing source of advertising revenues. "In teaming up with Teddy, we will benefit from the brand, talent and content properties that they have developed over the last 30 years and their deep understanding of Israeli entertainment tastes. Together, we will create a unique internet video portal, extending smile.media's positioning as Israel's #1 internet media group," Mr. Holtzman concluded. About Internet Gold Internet Gold is Israel's leading IP Group with a major presence across all Internet-related sectors. Its smile.communications segment offers a variety of Internet access and related value-added services, international telephony and enterprise/IT integration services. Its smile.media segment manages a growing portfolio of Internet portals and e-Commerce sites. Internet Gold has entered into an agreement to acquire 60% of the control and equity in 012 Golden Lines Ltd ("012") based on a valuation of US$ 140 million. 012 is a major Internet Service Provider with revenues of $ 138.8 million in 2005 and is also a leader in Israel's Voice Over Broadband domestic telephony. The agreement is subject to the approval of both boards of directors and the relevant regulatory authorities. According to the agreement, following the acquisition, 012 will merge with IGLD's Communications activities. Internet Gold is part of the Eurocom Communications Group. Its shares trade on the Nasdaq National Market and on the Tel Aviv Stock Exchange. For additional information about Internet Gold, please visit its investors' site at http://www.igld.com/. Certain statements made herein that use the words "estimate," "project," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the Company to be materially different from those which may be expressed or implied by such statements, including, among others, changes in general economic and business conditions and specifically, decline in demand for the Company's services, inability to timely develop and introduce new technologies, services and applications and loss of market share and pressure on prices resulting from competition. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's Annual Report filed with the Securities and Exchange Commission and its other reports as filed from time to time with the Securities and Exchange Commission. For further information, please contact: Lee Roth KCSA Worldwide +1-212-896-1209 In Israel: Mor Dagan Investor Relations +972-3-516-7620 Ms. Idit Azulay, Internet Gold +972-3-939-9848 DATASOURCE: Internet Gold CONTACT: For further information, please contact: Lee Roth, KCSA Worldwide, +1-212-896-1209; In Israel: Mor Dagan, Investor Relations, +972-3-516-7620; Ms. Idit Azulay, Internet Gold, +972-3-939-9848,

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