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Some SMS messages you may see in the near future:

(Hi. Where you Please call me)

(Night night. Big kiss. Sleep good.)

(Me Angry ! Me no speak you today !)

(She crazy fat stupid bitch)

(Miss you. Come here fast Me want kiss you now)

(Me class. Meet after school. Bye)

(You little shit)

• A new iconic language for SMS communication. • Practical, expressive, juicy and fun. • Simple and intuitive. Easy to learn and master. • Java application, resident on sending and receiving handsets. • Messages sent over existing SMS infrastructure.

Zlango is not limited to graphic symbols. It is easy to add a text segment at any point in the message. For example:

ICE CREAM

19:30
(Us go eat “ice cream” See you “19:30” there)

Benefits for Users (1)
• Much improved messaging experience – messaging now is quick and lively. • Fun generation – using Zlango always puts you in a playful mood. • Efficiency – fewer buttons to press, per ‘word’, per message. • Community tool – a group of friends can create and modify their own secret language! • International communication – connect with people from different cultures and languages

Benefits for Users (2)
• Simplicity – you don’t have to search endlessly for the exact right wording. • Excellent for those unskilled in written language: – Younger children 5 – 10 years old – People who rarely write, or are illiterate • Major improvement in business-generated SMS • Voice-to-sms – You can now create messages while driving, etc. No need to tap the buttons!

Benefits for Operators
• Providing their users with a desired application they will enjoy and use. • Creating and maintaining fun throughout the network. • Increase in numbers of subscribers using messaging. • Increase in situations enabling users to send SMS’s. • Increase in number of messages sent (Zlango fosters shorter, faster communication) • Increased revenues: – More messages – Higher revenues per message (if Zlango messages are priced higher) – A portion of users’ fees

Advantages
• • • • • • • • A truly universal product Huge global potential NO technological unknowns Extremely positive reactions from first users Very short time to market The ultimate case of viral marketing First mover advantage Strong IP position

Market Test Results
• Users enthusiastic about product • Users Find language friendly and easy to master • ZMS usage almost eliminates SMS usage • Users express strong desire to own the product, and recommend it to friends • High willingness to pay for the product, per month or per message.

Status
• First version of product currently in second market test in a real-life situation. • Agreement in principal to launch product in Israel with major Israeli operator. • In discussion with potential partners in Western Europe, and Asia. • Extensive patent application filed.

Market (1) – SMS Huge and Growing

• Global expenditure on P2P SMS will grow from over $ 30 billion (2004), to $ 50 billion (2009) • 960 billion SMS messages sent in 2004 (Source: Ovum) • P2P SMS traffic in Western Europe alone was 127 billion in 2004 (source: Yankee group)

The market (2) Youth Spending on
Mobile Products Substantial and Growing

A few Possible Revenue Streams
• User pays small monthly fee for Zlango • ZMS (Zlango message) costs slightly more than an ordinary SMS • Participants in small groups with their unique language and icons pay a higher monthly fee • Shared revenue from generation of userto-system messages • Various entities pay a fee for inclusion of their symbols and distribution of their messages

Financials
5 year revenue and income projections:
2005 Countries Europe Asia Pacific Americas Countries Revenues Net margin Net income
(Total)

2006 2007 2008 2009 10 4 2 17 6 5 28 41 41% 17 17 9 5 31 98 46% 45 17 9 5 31 154 54% 83

2

2 0.35

16 11 13% 1.5

($ millions )

Financial Model Assumptions
• About half of world not included in model (Japan, China, Russia, Africa – were all left out) • Only one type of revenue (monthly-fee) was included in model. All other revenue streams were left out. • Very gradual market penetration • Overall global penetration 1.8 % in year 5 • Penetration rate among youth only 9% in year 5 • Low cost for users, $ 0.5 - $ 1.3 per month • 50% of all revenues goes to operators and agents

Significant Long-Term Potential
• May achieve much higher penetration, usage and revenue numbers. • May become part of the basic cellular package (voice, voice-mail, sms, zms…) • May become the owner and manager of the graphic repository in many phones, and part of the core UI. • Many external opportunities,including merchandising, books, etc.

Team
• Yoav Lorch – Founder and CEO An experienced entrepreneur, led one company from inception to international operations and market cap of over $ 40 mill. Has extensive background in languages and writing for youth.
• Ehud Spiegel – CTO A seasoned technologist, with a very strong background in cellular technology and intimate knowledge and experience in implementing innovative cellular applications. • David Polonski – Art Director One of Israel’s top illustrators, with a very broad and versatile graphic background. Staff member at the Bezalel Academy of Arts.

Advisory Board
• Nahum Korda – Linguist, head of knowledge management group, Technion. • Ilan Neeman – Software specialist, Manager Messaging Systems, Orange Israel. • Ari Rappoport – Founder and CTO Proficiency, lecturer in computer science and cognition, The Hebrew University. • Yair Safrai – Managing Partner, Concord Ventures • Sharon Peleg – Founder and CTO Red Bend Technologies.

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