Opera finances improve despite fierce competition

The Norwegian browser company is finding a niche in the browser world, reporting its best-ever quarter for revenue and profit.

Stephen Shankland principal writer
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Stephen Shankland
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Revenue  derived from partnerships with operators has become Opera's biggest source of money.
Revenue (in Norwegian kroner) derived from partnerships with operators has become Opera's biggest source of money. Opera Software

Arguably, Opera Software has tougher competition now than at any point since the scrappy Norwegian company released its first browser in 1995.

Microsoft is aggressively developing Internet Explorer again. Firefox and Safari are widely used, and Chrome is ascendant. iOS and Android smartphones come with their own mobile browsers.

Despite that, Opera yesterday reported financial results with a healthy dose of good news. The recipe of Lars Boilesen, who took over as chief executive in early 2010, seems to be working.

Revenue for the second quarter of 2011 increased 29 percent from $31 million a year ago to $40 million. Profit rose even more, 47 percent, from $3.6 million to $5.3 million. Both those quarterly figures are records for the company.

The company makes money through a variety of means--search advertising revenue on its desktop browser, or licensing revenue as its browser is embedded in Internet-capable devices or its browsing services are used by mobile operators. Operator deals were the biggest source of funds, rising 41 percent to $14 million.

Opera CEO Lars Boilesen
Opera CEO Lars Boilesen Stephen Shankland/CNET

One prominent service, used by the Opera Mini browser for mobile devices, utilizes Opera servers to read Web pages and send compressed versions to the user; doing so breaks some features on interactive Web pages but can save dramatically on bandwidth and can improve performance. Another service, Speed Dial, provides quick access to bookmarks, and operators can pay to have their site placed prominently in the list.

"In 2011, Opera continues to see high interest among operators in the emerging markets in particular for the operator co-branded Opera Mini solution, for which the browser home page promotes content services from both Opera (such as search) and the operator (such as games and music)," Opera said of its results. "For such agreements, Opera and the operator work together and undertake joint marketing initiatives to convert existing Opera-only branded Opera Mini users to the co-branded solution. Opera sees this as a compelling way to increase ARPU [average revenue per user] on its more than 115 million Opera-branded Opera Mini users, while operators see such agreements as a way to increase data ARPU and profits."

Opera's overall percentage share of worldwide browser usage has been largely flat in recent months, but the company said usage of its browser is increasing in absolute terms--20 percent for the desktop browser, 260 percent for operator-branded Opera Mini, and 144 percent for Opera-branded Opera Mini.

"Of the more than 200 million active users, approximately 55 million were desktop users, 16.2 million were related to Opera Mini agreements with operators, and 121 million were Opera-branded users on mobile phones," Opera said. "In addition, Opera has over 10 million users on consumer electronic devices such as TVs." On Aably ndroid devices, Opera Mini users increased from just under 2 million in December 2010 to about 5.5 million in June 2011.

Opera still has plenty of competitive challenges. But at least for now, its niche in the browser market is getting bigger.

Users of Opera Mini affiliated with mobile operators are growing steadily.
Users of Opera Mini affiliated with mobile operators are growing steadily. Opera Software

Clarification at 4:35 a.m. August 26: The revenue figures in the top chart are in Norwegian kroner.