The Norwegian browser's stock popped today on rumors of a possible acquisition. Buying Opera would be costly but could give Facebook better control over its destiny.
If Facebook wants to buy Opera Software, the Norwegian browser maker's price tag just went up.
After last week's rumors that Facebook was considering acquiring Opera, Opera's stock price leaped 20 percent, or 6.70 Norwegian kroner, to a price of about 41 kroner ($6.83) in trading today.
That gives the company a market cap of $811 million, or as Internet wags would have it with today's exchange rate, about 0.8 Instagrams.
That's a lot of money, even before any premium. And Opera founder Jon S. von Tetzchner, who controls 10.1 percent of its stock through Dvorzak Invest, could be a roadblock, telling Reuters today he wants Opera to concentrate on its own business growth. "I want Opera to focus on growth and delivering good results; there are big opportunities for Opera," he said.
But Facebook does have a market cap of $87 billion, despite last week's Facebook IPO mess, which gives it some flexibility. And as Steven J. Vaughan-Nichols wrote at CNET sister site ZDNet, "It's not like Zuckerberg has to answer to either his stockholders or his board."
Opera declined to comment. We've contacted Facebook and will update this story if Facebook has anything to add. Pocket-lint reported last week that Facebook is looking to buy Opera, and The Next Web added that Opera is "talking to potential buyers."
Why would Facebook want to buy a browser company? To better control its destiny, most likely.
That's because vertical integration is all the rage these days as everybody tries to catch up to Apple's tightly linked suite of technologies, and a browser is an increasingly important foundational layer in the software stack.
Web standards such as HTML5 and CSS3 are tremendously important to Facebook because their cross-platform nature lets the company build apps for many mobile phones, not just high-profile models such as the iPhone. In a speech at Mobile World Congress in February, Facebook Chief Technology Officer Bret Taylor described how Facebook would like better Web standards support to make it easier to reach more mobile devices.
Right now, Web apps can't match native apps on mobile devices, a shortcoming pointed out by Mike Shaver, who leads Facebook's Android app development now but who previously led Firefox engineering. The Facebook app for Android is "mostly a wrapper" around the mobile Web site, he said.
In stark contrast to a few years ago, when Microsoft's Internet Explorer ruled the world, browsing competition is as fierce as it's ever been today. After Firefox opened the door, Google's Chrome raced through, and Apple's iOS means that Safari has become the incumbent power for mobile devices. Even Yahoo is getting into the browser business with Axis, though that relies on other browsers for the core job of rendering Web pages.
Having a browser could help Facebook ensure that using a Web-based Facebook app works the way the company wants -- in particular for the tens of millions of Opera users who don't have Android or iOS phones. And a browser could serve as a vehicle to promote the services that Facebook wants -- for example, searches wired to Facebook's partners, like Microsoft Bing.
Just getting a browser team isn't enough to really control your destiny, though. Apple dramatically restricts what third-party browsers can do on iOS, for example, and Microsoft plans similar browser restrictions with Windows RT, its version of the OS for devices using low-power ARM processors typically geared for tablets and other mobile devices.
Acquiring Opera also could give Facebook greater clout in creating and solidifying Web standards. Opera has small market share globally compared to its rivals, but it's still got millions of users and a strong presence in standards groups that are hammering out the future of the Web. Facebook recently has become active in one of those groups, the World Wide Web Consortium.
Then of course there's that Facebook phone rumor. Given the company's penchant for Web apps, it's certainly possible such a device could resemble Mozilla's Boot to Gecko (B2G) project, which runs Web apps in an embedded browser.
Through B2G, Mozilla is working on some of the interfaces that a browser-based smartphone needs, including some of the interfaces that Shaver called for, including camera control and notifications. Telefonica has signed on as a B2G supporter as a way to sell lower-cost smartphones, so the project is real if not anything that's going to dethrone Android or iOS any time soon.
So I could see a case for Facebook acquiring Opera, even if spending hundreds of millions of dollars has a tremendous opportunity cost. The acquisition would be a stretch, perhaps, but it looks right now like Facebook is trying more to stretch its wings than take a cautious approach to growth.