For many smartphone owners, it’s tough to get excited about a mobile browser. While power users will always have their app of choice for specific features, most internet users likely default to a mobile browser for no reason at all.
As a result, many Western consumers don’t even understand why Opera exists. With Safari for iOS, Chrome for Android, and Firefox for nerds, does the world really need another app to surf the web?
A closer look at Opera’s history, business model, and traction in Asia shows how that assumption is a little short-sighted. The company 350 million global monthly active users across its app suite, 250 million of which also use Opera Mini, its most popular browser. Half of those users are on iOS and Android, but the remainder are on Blackberry, Bada, Symbian, and other platforms that now make up the mobile long tail. Opera Mini has a serious presence in developing markets where data plans are expensive and networks are lousy. This includes India and Indonesia, where it has 50 million and 30 million MAUs respectively.
“We think global,” says Opera CEO Lars Boilesen in conversation with Tech in Asia. “We don’t go to the US anymore. We don’t go to Norway or Denmark. We go to big emerging markets.”
Throughout its twenty-year lifespan, Opera has simultaneously played the role of underdog and forward-thinker. Founded in 1995, the company got its start building desktop browsers. Boilesen (who joined Opera in 2000) admits that this was a losing game after Microsoft bundled Internet Explorer with windows, adding that it set the stage for the company’s future.
“We realized that eventually there would be internet on devices other than just PCs,” says Boilesen. “So while Netscape and Microsoft made their browsers bigger and bigger, we just made our browser smaller and smaller. That way, when manufacturers started testing out browsers for mobile phones, we were ready.”
Boilesen says that Opera built browsers for “50 to 60 different platforms” in order to become the most ubiquitous browser for push-button phones.
That strategy – borne partially out of necessity – turned out to be both a blessing and a curse for Opera. To a certain extent, Boilesen explains, it put the firm back on the skids once the iPhone introduced touchscreen smartphones. A company that built browsers for countless devices would once again get nudged out by the default choices.
“We asked ourselves, where can we be relevant? It was hard in the US, where we had focused on in the past, because browsers had become a bit commoditized. There were open-source browsers, iOS had a good browser, and Android had a good browser.”
Lars Boilesen, CEO of Opera
On the other hand, Opera’s investment in feature phones helped give it a strong edge in emerging markets like India, Indonesia, and Brazil – where consumers couldn’t afford iPhones, and where allegiance to PC software remained less sticky.
“We said to ourselves, let’s go to big markets where people aren’t online yet. We went to Russia, Indonesia Brazil, Latin America, Vietnam – we didn’t care where the most profitable users were, we just wanted a big audience.”
In Autumn 2007, the company released Opera Mini, a mobile browser for both feature phones and smartphones that compresses data on Opera’s servers and then sends it back to the user’s phone. Boilesen said the product was a hit – though pre-installs surely aided traction – and helped the company develop a brand that could fend off spillover towards Safari and Android once customers ditched their Symbians for Androids.
“The markets where we’re strong are mobile first markets. If you ask our users there why they use Opera, they’ll just say, ‘I don’t know, it’s just how I go online.’ Brands like Micromax come with us pre-installed just because they want to provide an application that people use.”
Singing in duets
What’s unusual about Opera is that it’s essentially two separate companies. While it’s consistently funneled resources into its mobile browsers for emerging markets, its moneymaker is its Opera Mediaworks – a mobile ad network that mostly serves Western web properties.
“If you want to be a profitable internet company, you need to have a business model around advertising. So I thought, where’s the biggest advertising market? It was the US at the time; companies in the US were just beginning to spend on mobile ads.”
After releasing an SDK for publishers in 2010, Opera embarked on an acquisition spree, eating up a series of US-based mobile ad networks. The company bought San Mateo’s AdMarvel for US$8 million, Mobile Theory for US$18 million, 4th screen for US$8 million, and Skyfire for US$155 million. For a time, many speculated that the company was mulling a potential sale to Facebook. A deal like that would have made sense at the time – Facebook, the mother of all platforms, could have invested in another platform, with muscle in mobile browsing and mobile ads. But ultimately no deal surfaced.
Boilesen claims that Opera is now the world’s third largest mobile ad network, and brings in two-thirds of the company’s total revenue. While Opera’s ad business hasn’t yet converged with its bets on browsers in Asia, the CEO says he anticipates more synergy between the two sides in the future.
“If you look at markets like Russia or Indonesia, there’s starting to be a marketplace [for mobile advertising],” says Boilesen. “But whereas in India you might spend 10 cents for one user, in the US you might spend 20 dollars for the same user. There are still huge differences, but it’s catching up.”
Despite the continued growth of Opera, Opera Mini, and the recently-launched Opera Max, Boilesen says the company isn’t yet concerned with monetizing its properties. In his view, Opera is a platform that can capitalize on a number of opportunities as mobile adoption matures in emerging markets. That could mean affiliating itself with rising tides in gaming, advertising, and ecommerce across the continent. The CEO compares the company’s hopes for Opera Software to what some perceive as the “Chinese model” of internet businesses.
“I think that we at Opera are much more like a Chinese internet company than a Western one,” says Boilesen. “We have a lot of contacts in Silicon Valley. It’s really easy to have a lot of discussions there about emerging markets, but it’s hard to make things happen. Western companies kind of wait until there’s a marketplace before they start investing. Chinese companies are more aggressive. They go all in.”
Editing by Paul Bischoff, images via Odd Moe and Opera
This post Opera CEO: ‘We’re more like a Chinese company than a Western company’ appeared first on Tech in Asia.
Opera CEO: ‘We’re more like a Chinese company than a Western company’
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