YIGAL ARNON & CO.

Response: The Staff comment is fully noted, and the Company wishes to supplementally clarify to the Staff that advertising revenues are generated primarily through the offering of search capabilities to the Company’s customers. These search capabilities are powered by a search provider (e.g. Google, InfoSpace, etc.) provided through downloading the Company’s products – Incredimail Xe or Incredimail Premium. The advertising (search) revenues are generated based on the extent the Company’s customers are using the search capabilities provided in the Company’s products. The rest of advertising revenues, which currently represents less than 2% of the Company’s revenues, is not dependent on the customers’ usage of our products, rather are fees paid by advertisers to place their advertising on the Incredimail Xe product. Therefore, the Company supplementally wishes to clarify that although the substantial majority of advertising revenues are dependent on its customers’ usage of the Company’s products its advertising customers are not receiving the Company’s products as part of their advertising purchases. The Company respectfully submits to the Staff that in future filings it will present two line items for revenues (with comparative numbers) to conform to Rule 5-03 of Regulation S-X and the Staff’s comments, as follows: (i) revenues from Advertising and other services and (ii) revenues from products.

We appreciate your time and attention to the Company’s responses to the Staff’s comments. Should you have any additional questions or concerns, please call me at 972-3-608-7726 or Nahal A. Nellis, Esq. at 972-3-608-7753.

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