Opera finds footing in browser war

After years of waiting patiently for AOL Time Warner or Microsoft to stumble, Opera Software is trumpeting its relationship with IBM as evidence it's making progress against its massive rivals in the browser market.

Meta Group says the Opera-IBM deal is the latest milestone in the software company's two-year successful run in establishing itself as the leading alternative browser maker. see commentary

Opera, based in Oslo, Norway, on Tuesday took the wraps off its 6-month-old contract to supply IBM's Internet appliances with browser software. Following similar announcements with Advanced Micro Devices, Ericsson, Psion and Be, the development signals that major players in the Internet appliance market may be looking at Opera as an attractive alternative to Microsoft and AOL.

While Microsoft solidifies its command of the desktop browser market with Internet Explorer, AOL and its Netscape Communications unit have been positioning their browser, under open-source development by Mozilla.org, as the software of choice for Internet appliances and other non-PC devices.

The IBM contract to use Opera in its NetVista Internet Appliance and another device not yet disclosed "is certainly something that the AOL folks would have liked to have," said David Smith, an analyst with research firm Gartner. "It sounds like Opera is muscling in."

The IBM contract is the latest in a series of moves by the second-tier browser company. Late last year, Opera began offering an advertising-supported, free version of its software. The company says that move is paying off handsomely.

Not only have downloads spiked, with as many as 25,000 per day since the beginning of the year, but paid licenses for the software have doubled since the free offering as more people have tried the software and opted to pay $39 for an ad-free version.

Opera has been aggressively marketing its software for Internet appliances. In February, the company released a browser for Symbian's EPOC operating system for cell phones and other mobile Internet access devices.

Opera's progress with non-PC devices spells competition for Microsoft, which has had mixed success in getting its IE browser and CE operating system software into the non-desktop market, and for Netscape, which is betting its future on the success of the Mozilla browser in non-PC devices.

Mozilla's effort, to redesign its browser from the ground up so that it can be separated into independent components, has so far yielded a Netscape-branded version, dubbed Netscape 6, which critics blasted as not ready for prime time.

Netscape "has been trying to make its browser more like ours," said Jon S. von Tetzchner, chief executive of Opera. "To that extent they will be competing with us. The only difference is that we've been making a small, fast browser since we started, in 1994. Netscape started doing something about it two years ago."

The AOL division did not return calls seeking comment for this story.

AOL also has inked deals with another browser maker, Nokia, to get the Netscape brand into cell phones, a strategy Netscape has described as "complementary" to its Mozilla effort. The open-source group itself has labored to release its own version 1.0 browser.

Tetzchner said his company is not writing off Mozilla but expects to remain ahead of it.

"Our customers are coming to us after evaluating all the alternatives, including the Mozilla browser," Tetzchner said. "A lot of customers got fed up with waiting. Corporate customers who had intended to go with Mozilla have come over to us."

Tetzchner thinks Opera is benefiting not only from Netscape's programming woes, but from Microsoft's reputation in the wake of its antitrust trial.

"Microsoft is struggling because most companies do not want Microsoft to have the dominance they had on the desktop," Tetzchner said. "The way Microsoft has been behaving in the desktop market--if you read some of the core documents from the antitrust trial--was unfairly tough on their corporate customers. That will benefit Mozilla, but it's definitely a very good position for us to be in as well. Companies are going out of their way not to work with Microsoft."

Microsoft declined to comment on IBM's decision to use Opera's browser or on Tetzchner's interpretation of the antitrust evidence. But a representative did point out that Microsoft supplies the MSN Explorer browser for Internet appliances from Compaq Computer and Emachines. Microsoft has also had its share of success getting its software, including browsing components, into cell phones.

Microsoft's embedded-systems department denied that Opera was taking any wind from its sails.

"We're really happy with the momentum that we've seen," said Phil Shigo, lead product manager in the embedded and appliance platforms group. "In the last six months, since the summer, we've basically seen over 780 companies building devices using our embedded operating systems. We just ended our first development conference, where we had over 1,000 developers."

Tetzchner, meanwhile, is agnostic over the cause of Opera's newfound success.

"We're getting more users, and we're getting them from somewhere," Tetzchner said. "Whether they're from Netscape or Microsoft we don't know. And as Internet appliances become more popular and we start getting new Internet users, we expect to take from both of them."