Online translations startup Babylon says that since its shift from freeware to payware, the pace of downloads has increased. Its results would therefore belie fears that software services can't sell on the Internet.

The company expects revenue to exceed a million dollars in 2002, rising to a few million in 2002. It calculates that 70% of its income is generated by enterprises, with the rest coming from households, chief executive Alex Azulay told TheMarker.com.

Income does not yet cover the company's cash-burn rate, though. Babylon is preparing for another financing round to enhance its marketing. Even without extra capital the company is in no danger of closing, Azulay said, though he would not comment on its financing plans.

Meanwhile, Babylon announced a rise in licensing prices. The price for using Babylon's software for one year has risen from $12.95 to $17.95. A two-year license has risen from $19.95 to $28.95. That is also a special rate, the company says, which may be raised in two months.

Alternatively, users can buy a permanent license for $44.95, which grants usage rights plus one year of free service and support. Subsequent software updates and support will cost extra.

Since the company's establishment in September 1997, it has registered 12 million downloads. The company says it has not felt a deceleration of downloads since it started charging for service, on the contrary. It says 20,000 people register for use every day.

Right now Babylon is concentrating its marketing efforts on Europe, which is responsible for 45% of its downloads. The company has a sales office in Germany and employs the Spanish company GTI to market in Spain.

The company has launched dictionaries in 13 languages, including Hebrew, and enables access to hundreds of sources of information. Its software also allows users to create intra-company glossaries accessible via intranet.