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Opera and Skyfire have a lot in common: specialized use cases, small, dedicated populations of users. That appears to be enough for the desktop browser to swallow the mobile one. Opera Software ASA announced via a press release this morning that it is acquiring Skyfire and its assets, in a deal worth $155 million USD. The sale price includes a mix of cash and stock, $50 million of which will be delivered up front.

While its market share is small in the desktop world, Opera's userbase is incredibly dedicated, and many don't realize that the software and the company have been offering surprisingly advanced browsing for nearly two decades. Opera currently offers two Android browsers, Opera Mobile and Opera Mini, which compress web pages and images via remote servers before delivering them to smartphones.

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Skyfire got its start on Symbian (later Windows Mobile) way back in 2007, with its signature feature of on-the-fly Flash video cached and delivered by remote servers. Skyfire became available for Android in 2010, but hasn't been updated in over 18 months.

Opera wasn't coy about its reasons for the acquisition.

“The market opportunity for video/media optimization solutions geared towards operators and consumers is significant. After a thorough evaluation of this market, we strongly believe Skyfire is the clear leader for the future in this space”, said Erik Harrell, CFO/CSO of Opera.

According to the press release, Skyfire will continue as a separate product under the direction of CEO Jeffrey Glueck, who will be taking additional duties as the Executive Vice President of the Operator Business for Opera. The two companies will have at least some kind of crossover, in so much as "a powerful new set of joint products to be released over the coming year" can be understood. The deal is expected to close within one month.

Mountain View, California and Oslo, Norway — February 15, 2013

Opera Software announced today that it has acquired Silicon Valley based Skyfire Labs, a leader in mobile video optimization and cloud solutions for mobility.

Skyfire, headquartered in Mountain View, California, is known for its Rocket Optimizer™ software. This allows mobile operators to leverage cloud computing to optimize virtually any video and other multimedia on crowded cell towers, including 3G and 4G LTE networks. Rocket Optimizer on average provides mobile networks a 60 percent boost in capacity by reducing the size of video and other multimedia content as needed to fit the available bandwidth. Skyfire can detect when specific users are facing poor quality of experience or connections that need assistance, and intervene in milliseconds. This can minimize the long start times, rebuffering, and stalls on video and audio streams that frustrate mobile users around the world. The approach aligns with the trend toward SDN (software-defined networking) and NFV (network function virtualization) among telecommunications operators, thanks to its elastic and virtualization-friendly cloud architecture.

Skyfire also offers Skyfire Horizon™, a mobile browser extension and toolbar platform that allows users to personalize their smartphone browser and operators to gain new monetization opportunities. Skyfire has honed its technology through a variety of top-selling consumer applications, which have more than 20 million worldwide downloads to date.

Skyfire currently counts three large U.S. mobile operators as customers for its Rocket Optimizer and Skyfire Horizon solutions, and is in trials with ten other operators around the world.

“Opera and Skyfire are a natural fit,” said Lars Boilesen, CEO, Opera Software. “Both companies have evolved far beyond their browser roots. Skyfire adds capabilities to our portfolio around video, app optimization, smartphones and tablets, and strength in North America. With video expected to consume over two-thirds of global mobile bandwidth by 2015, and as time spent on Android and iOS apps explodes, we are excited to extend Opera’s solutions for operators.”

“Opera practically invented cloud compression to improve mobile user experience, and the team at Skyfire is proud to join forces and advance cloud solutions together,” said Jeffrey Glueck, CEO of Skyfire. “Opera’s over 100 carrier relationships, global sales team, and delivery organization can accelerate the global commercialization of Skyfire’s technology. Opera´s Mediaworks advertising unit with AdMarvel, Mobile Theory and 4th Screen Advertising will strengthen Skyfire Horizon by offering mobile operators a complete turnkey solution including ad optimization, ad sales, and rich analytics. The synergies across all the product lines for both companies are tremendous.”

After the deal closes, Glueck will assume the role of EVP of the Operator Business for Opera, as well as CEO of Skyfire, and will oversee the joint offerings for Opera across Opera Mini co-brand solutions for Operators and Skyfire’s product lines. Skyfire will remain an independent entity as a wholly-owned subsidiary of Opera, and will continue to develop and support the Skyfire browser.

The two companies envision a powerful new set of joint products to be released over the coming year by combining their talents and know-how. In particular, they look to expand on Opera’s Web Pass offering, which allows consumers to purchase innovative data plans such as an unlimited ‘day pass’ of popular apps and web sites for an affordable price, thanks to video and data optimization. WebPass can enable new business models for operators, such as toll free data, ad-supported data, and more.

“The market opportunity for video/media optimization solutions geared towards operators and consumers is significant. After a thorough evaluation of this market, we strongly believe Skyfire is the clear leader for the future in this space”, said Erik Harrell, CFO/CSO of Opera.

The acquisition price includes a mix of cash and stock, with an upfront consideration of US$50 million (including US$8 million of cash on the Skyfire balance sheet) and performance based earn-out payments over three years, including US$26 million in cash held in escrow and funded upfront, that can bring the total deal size to $155 million.

The Opera acquisition of Skyfire is expected to close before March 15, 2013.

Jeremiah Rice
Jeremiah is a US-based blogger who bought a Nexus One the day it came out and never looked back. In his spare time he watches Star Trek, cooks eggs, and completely fails to write novels.
  • http://www.facebook.com/kazutaka.muraki Kazutaka Muraki

    I use the Opera mobile since my first android phone, an i am really happy with it...
    Lets see what new this this brings us...

  • Jack

    Havent been using Opera much since they blocked flash even tho it was my favourite browser. Switched to Boat, never had a problem with flash on 4.1.2, I really cant understand why its no longer supported on android, it is still used by most websites and is integral to a full Internet experience. I could see it being a big issue for many users in the future with 5.0 if sideloading an old version isnt supported on 5.0 then I will certainly be looking at alternative OS not just browser.

    • UniBroW

      It's funny, out of all the apps that DON'T run smoothly on my Asus Infinity, flash isn't one of them. Flash runs so good on my Asus despite it's severe issues. oh well

  • Paul_Werner

    Crazy how this would get $155 million while Instagram gets 1 billion

  • Matthew Fry

    So... Skyfire will stop being terrible?

  • Marcos Amano

    That's awesome news!!

  • SetiroN

    This + Webkit on Opera = epic web browser. :)

  • http://www.facebook.com/javier.dominguez.33483903 Javier Dominguez

    To all Android devices that wish to have Adobe Flash Now you can, Go to this Link : http://forums.adobe.com/message/4675670#4675670