Google Made Opera Browser Free

Om Malik | Wednesday, September 21, 2005 | 10:14 PM PT | 45 comments

A couple of months ago, I had a chance to interview Jon von Tetzchner, chief executive officer and co-founder of Oslo-based Opera Software, for Business 2.0 Titans of Tech series. What attracted me the most about his company was that it had customers paying for something - aka browser - which others like Microsoft and Mozilla were giving away for free. In the interview he explained, “About 100,000 choose to pay for Opera each year, paying about $39 per copy. So that’s one revenue stream.” That works out to about $3.9 million - not a lot, but still a lot for a company with just over $28 million in sales. So this week, when the company announced that it will start giving away its browser for free, I was amazed that they were willing to give away that revenues. There had to be a catch.

Well, little digging around, and hounding the Opera PR team, I found out that the decision to give away the browser came after the company struck “compensation deals” with some of the search engines. Apparently, the premier tenant for browser’s built-in search window, is Google. “The current most important deal now is with Google,” company spokesperson Eskil Siversten wrote in an email. The company indicated that it has similar referral-for-dollars agreements with the likes of eBay and Amazon. Given that Opera is about one percent of the total browser market, it cannot be making as much money as Mozilla folks.

Mozilla Foundation, the folks behind Firefox, brings in about $30 million a year, according to Tribe-founder Mark Pincus. Even deals with Amazon.com bring in big money for Mozilla. (I wonder how much Apple gets paid by Google for Safari tenancy?) This clearly is turning out to be quite a niche for browser makers.

Related reading: Titans of Tech Interview with Jon von Tetzchner.

25 trackbacks so far

[...] “Thanks to Om Malik for hounding the folks at Opera and finally getting them to admit that they’ve signed a search referral deal with Google, similar to what Mozilla/Firefox has — which has been enormously profitable for the no-longer-non-profit Mozilla.” “Well, little digging around, and hounding the Opera PR team, I found out that the decision to give away the browser came after the company stuck “compensation dealsâ€? with some of the search engines. Apparently, the premier tenant for browser’s built-in search window, is Google. “The current most important deal now is with Google,â€? company spokesperson Eskil Siversten wrote in an email. The company indicated that it has similar referral-for-dollars agreements with the likes of eBay and Amazon. Given that Opera is about one percent of the total browser market, it cannot be making as much money as Mozilla folks. “ [...]

[...] Oggi si viene a sapere che Opera sarĂ  scaricabile gratuitamente grazie a Google. Si, in pratica Google paga Opera per i search referrals derivanti dal box di ricerca presente all’interno del browser. [...]

[...] Wondering how come Opera Software can give away a browser for free? It’s all to do with revenue earned from searches , in particular Google (what a surprise), Amazon and eBay. [...]

September 22nd, 2005
12:20 PM PT

[...] 9/21/2005 @ 6:24 PM — With new version 8.5 Opera has gone all add-free, all the time. Premium support is still available for those willing to pay. The company says that a transition to freeware was made possible by search engine revenue. [...]

[...] Om Malik’s ,um blogger americano, diz que A Opera Software aceitou distribuir gratuitamente o Opera devido á acordos com sistemas de busca - e o serviço de busca padrĂŁo do Opera Ă© o Google. Eles tambĂ©m tem acordos de visitantes-por-dinheiro como Bay e a Amazon. E como o Opera tem apenas 1% dos usuarios, eles nĂŁo podem fazer dinheiro com a Mozilla. Este seria o motivo da distribuição: Mais usuarios, mais dinheiro, mais dinheiro, mas condições pra manter o Opera de graça, Opera de graça, mais usuarios…. [...]

[...] Some big[-ish] news from the browser world this week, Opera have made the decision to offer their browser for free. This is a huge move for Oslo based Opera who before this charged $39 for their browser (there was also a free version with annoying ads at the top). With 100,000 buyers per year the $3.9m was a big part of their $28m annual sales which makes this move so surprising. Some investigation from Om Malik has uncovered that Google is behind the move. Apparently Opera have signed a “referral-for-dollars” agreement with Google (amongst others). Mozilla have done the same and they earn about $30m per year from the deal!! I always thought it was ridiculous that Opera was charging for their browser, even more so with the emergence of Firefox. Opera’s a decent browser but in all honesty you get fuck all for the $39. Other browser news, the current browser war is heating up. Firefox has just had to plug another hole (and a fairly serious one at that) adding to the row over browser security. This one has really dented Mozilla’s claims that Firefox is more secure than IE Shit Six. [...]

[...] Interesting exploratory piece by Om Malik which probes why Opera became free. I’ve already seen one user who paid for Opera exclaim that he was annoyed to see that another piece of software he paid for was now free. Apparently Opera sold about 100,000 licenses at 39 bones each per year. That’s some scratch to be out, so Om Malik dug around and hounded the Opera PR team to find out why: I found out that the decision to give away the browser came after the company stuck “compensation dealsâ€? with some of the search engines. Apparently, the premier tenant for browser’s built-in search window, is Google. “The current most important deal now is with Google,â€? company spokesperson Eskil Siversten wrote in an email. The company indicated that it has similar referral-for-dollars agreements with the likes of eBay and Amazon. [...]

[...] Linux vs. Linux: Which Distro Should You Dump Windows For? Loomia - Social Podcast Search Engine Make those -blam!-my images look half-way-decent! Hacking the Exxon/Mobil SpeedPass Sensing them Pedestrians… Just Damn Outright Cool. One of the only VR technologies I’m willing to test… Frankie (Halo) Started A Group… Kick-Ass iPod Nano Spoof Commercial SMS via E-Mail - the EASY way! - hey, maybe when I get my laptop - they can use their cell phones and rack up money - while I don’t pay a dime! Whatdya know? Something on Swearing… on the air… I dunno - login: nytimes6:nytimes Google Maps Hurricane Tracker - Bummer, it went offline after CNN, Digg, Del.icio.us, Slashdot, fill in some other top 100 site here… all linked to it. DOH! Windoz on Linux? - It’s in beta - but it’s got me excited!!! Linux2006! Almost every free Codec for WinXP on teh interweb. Browser Makers Getting Paid By Big-Name Companies… Cool! PS3 In Japan… Spring ‘06. PS3 in Europe/USA… Late ‘06, 2007. - Glad the 360’s coming out in 2 months to the day, and not 18 months! Filed under: Uncategorized [...]

[...] I found this article on why Opera went free and how it’s related to Google. [...]

[...] Interesting. Full blog post. [...]

[...] Something else I read involving google today, is related to the Opera web browser. You may have heard that in the last few days Opera has been released for free, without the old adverts that used to accompany the free version. Opera has annual sales of $28 million and with a whole $3.9 million of this coming directly from sales of the desktop browser, this seems like the move of a suicidal company. That is of course until you find out that Opera are being paid a hefty chunk of money by google to incorporate the google search engine into the browser. It would seem that Mozilla are also making the same kind of money from both google and amazon. These lucrative ’sponsorship’ deals almost makes me want to launch a browser company.. Source: (link) Opera browser (Free): (link) [...]

[...] Update 2005-09-23: According to Om Malik, it was Google that made Opera free, through a compensation deal. Well, yay Google :). [...]

September 23rd, 2005
10:18 AM PT
Subzero Blue said:

links for 2005-09-23

Netvibes An Ajax based customizable homepage. Really cool. (tags: ajax customized personalized homepage) Google Made Opera Browser Free Apparently Google played a role in making it possible to offer Opera for free. (tags: google opera deal browser fre…

September 23rd, 2005
11:01 AM PT

[...] After my buddy Om Malik did some digging, it turns out that Opera’s move to make its browser free had less to do with its community and more do to with inking an increased compensation deal with Google. This makes plenty of sense in terms of Opera’s longer term viability (paying for browsers is simply no longer an option—sorry OmniWeb) but also suggests that my spidey-senses are becoming more and more savvy: Though they claim that “Opera fans around the globe made this day possible,” for some reason, that sentiment rings hollow to me. So now that we have Mozilla Corporation and Opera showing that a viable business is possible through leveraging various browser defaults, it makes it somewhat easier to begin to answer a question we get a lot. [...]

September 23rd, 2005
11:35 AM PT

Mozilla Firefox is a cash cow!

Mozilla makes $30 Million dollars a year!First a word of warning… DO NOT download Mozilla 1.5 beta - it is buggy as hell and driving me nuts! I love firefox and have been using it since the very early days of firebird, download firefox if you haven’…

[...] Om Malik - Google Made Opera Browser Free - Interesting…. [...]

[...] Om Malik is now reporting that Opera struck similar deals with Google et al. So this is how they did it. Om’s right. Google has made Opera free and paved the way for an exciting time in browser development. [...]

September 24th, 2005
12:22 PM PT

[...] Yep, check it out. If you don’t have Opera yet, you NEED TO GET IT! I can’t stress it enough… And its completely free, thanks to Google! Google is like a software Robin Hood, giving free what once was pricey. I can’t wait til they buy out Adobe and start offering free Photoshop, lol… [...]

[...] Apparently, Google is responsible for making Opera a free web browser. « Ticket to the Opera   [...]

September 27th, 2005
12:55 AM PT
FlyHigher said:

Opera is free now.

Google made opera browser free

October 4th, 2005
7:45 AM PT

Opera Browser for Free Thanks to Google

Recent free Opera browser offering is due to a deal with Google, says Eskil Siversten. The Opera Software company is also having referral agreement with eBay and Amazon.
“About 100,000 choose to pay for Opera each year, paying about $39 per cop…

December 14th, 2005
11:01 PM PT

[...] Pierre Chappaz, former head of Yahoo Europe, on his french language blog says that Google might be interested in buying Opera. (Translation of the original post here) This would be a response to Microsoft’s Internet Explorer etc etc etc. In other words ….. a pure and absolute rumor for now. Gary Price has more details on this. Previously I had posted how Google had helped Opera become a free software. Apparently, the premier tenant for browser’s built-in search window, is Google. “The current most important deal now is with Google,” company spokesperson Eskil Siversten wrote in an email. The company indicated that it has similar referral-for-dollars agreements with the likes of eBay and Amazon. Given that Opera is about one percent of the total browser market, it cannot be making as much money as Mozilla folks. [...]

July 3rd, 2007
5:09 AM PT

[...] question still is: Why? While a software suite like iLife has the potential to bring in revenue, these days web browsers are given away. So the move isn’t as simple as selling a piece of [...]

October 23rd, 2007
11:30 AM PT

[...] Also: Back in 2005, Om Malik wrote about how Google help make the Opera browser [...]

August 22nd, 2008
12:20 PM PT

[...] read more | digg story [...]

20 comments so far

Peter Rip said:

This idea of paid carriage for the browser makers is nothing new. Back in 1996, when Netscape was dominant (ancient history), they charged Yahoo, Infoseek, Excite, Lycos, and Magellan $5M each for a rotation of the traffic off of their Search button. That was when these 5 search engines were doing 20M queries/day collectively, not the billions of page views Google does now. The only search engine with a material source of non-browser traffic then was Yahoo. Guess which one survived.

Andy said:

What “digging” did you have to do in order to find out what was common knowledge? See Ars Technica, or the Boston Globe. It was no secret that they inked a deal with Google (and eBay, and Dealtime, etc).

NAME said:

Err, Opera has had the Google search for ages! It actually “invented” the (Google) search field which is now standard in Firefox and IE7.

Mike said:

Opera made it clear from the get-go that one of the factors in making Opera license/ad free was it’s deals with Google among others.

Quote from Jon von Tetzchner and link:

“What finally made this possible is the increase in revenues from search and service partners. We can now go free and still increase our revenues.”

(link)

JohnB said:

stuck “compensation deals�

STRUCK “compensation deals”

STRUCK

sheesh.

Derek said:

GOOGLE ROCKS!

Ravi said:

I am not a bit surprised that opera released their web browser for free. Considering the popularity that firefox was gaining in the web community, it was only a matter of time that they took that decision.
As far as browsing is concerned, I am only impressed by their in built email client.
For the rest of the stuff, I will stick to firefox.


(link)

Pallab De said:

You didn’t really need to hound the folks at Opera to find this out.It was out in the open for everyone to see.
The exact breakdown of their revenues from the desktop market is as follows

During the first half of 2005, 30% of Opera`s desktop
revenue was generated by selling advertising displayed in the integrated ad banner, 25% by licensing sales and 45% by Google search and other affiliate partners.

And a part from Google there are a few other sources also.Recently Opera has revised it’s contract with google.
Read this (link)

Armitage said:

I wonder if we’ll see more of google in Opera 9/Merlin?

Lawmune said:

I wrote this article about Opera’s positioning:

“Aiming for Second: Considering Opera’s Place in the World of Web Browsers”

(link)

Perhaps you will find it interesting

January 2nd, 2006
2:23 PM PT
mrx said:

Opera is a great browser and I boght every new version that came out but I dont think this new “freewere” will help it stay the best . I think they’ll invest as little time as possible into building it. Its going to be just like anything else “free”. New stuff over and old uder the rug where it cant be seen.

March 5th, 2006
1:00 PM PT
Shauna said:

So your saying opera is FREE??????

August 5th, 2006
1:39 AM PT
Ali Imran said:

i want opera free for official use

January 24th, 2007
6:54 PM PT
bob said:

Check out this site!

February 22nd, 2007
1:36 AM PT
Shannon said:

Hi! Nice site!

February 22nd, 2007
1:36 AM PT
Chuck said:

Hi! Nice site!

February 22nd, 2007
1:36 AM PT
Stacy said:

Hi! Nice site!

May 12th, 2007
11:55 AM PT
Waffa said:

Well, thats howit should work, smart move by Opera.

I would love if google would buy opera and make it to fullt support all google services it does not support now.

WaffaDrunker

June 3rd, 2007
10:05 AM PT
premyan abraham said:

what a speed of this wonderful browser

December 3rd, 2007
1:35 PM PT
yit said:

i think its a good think that opera made the step into freeware software, lets face it, freeware software makes our life easier

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