Blog Post

Google Made Opera Browser Free

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 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.

47 Responses to “Google Made Opera Browser Free”

  1. 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.


  2. 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.

  3. 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

  4. 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.

  5. 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).

  6. 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.