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.
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.
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).
Err, Opera has had the Google search for ages! It actually “invented” the (Google) search field which is now standard in Firefox and IE7.
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.”
http://operawatch.blogspot.com/2005/09/opera-ceo-goal-to-become-2nd-most-used.html
stuck “compensation deals?
STRUCK “compensation deals”
STRUCK
sheesh.
GOOGLE ROCKS!
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.
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http://linuxhelp.blogspot.com
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 http://www.pallab.frihost.net/blogs/index.php/2005/09/20/opera_is_free
I wonder if we’ll see more of google in Opera 9/Merlin?
I wrote this article about Opera’s positioning:
“Aiming for Second: Considering Opera’s Place in the World of Web Browsers”
http://www.cjas.org/~leng/lainspotting/2005/09/aiming-for-second.html
Perhaps you will find it interesting
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.
So your saying opera is FREE??????
i want opera free for official use
Check out this site!
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Hi! Nice site!
Hi! Nice site!
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
what a speed of this wonderful browser
i think its a good think that opera made the step into freeware software, lets face it, freeware software makes our life easier