Opera to buy Skyfire Labs for faster mobile video delivery

IDG News Service - Browser developer Opera Software will acquire Skyfire Labs, which develops technology to speed video delivery over mobile networks, the companies said Friday.

The deal is valued at $155 million, which includes a mix of cash and stock and expected performance based earn-out payments over the next three years, Opera said in a news release. The deal is expected to close before March 15.

Skyfire, based in Mountain View, California, supplies three large U.S. mobile operators with its Rocket Optimizer software, which compresses video and other multimedia content for faster delivery over 3G and LTE networks.

The company says its software gives mobile networks a 60% increase in bandwidth capacity, which helps when mobile networks are experiencing high traffic. It says Rocket Optimizer detects and intervenes when users are experiencing poor-quality connections.

Skyfire also makes Horizon, which it describes as a mobile browser extension and toolbar that allows people to personalize their browsers. It's a white-label product that operators brand themselves. Toolbar extensions can be customized by operators, which Skyfire said can act as a "beach front" for promotions and advertising that can bring in revenue.

Opera said video is expected to consume two-thirds of available mobile bandwidth within two years. Skyfire's technology will be integrated into Opera's Web Pass, which is a product for operators for offering mobile data packages to subscribers.

In February 2012, Opera moved more deeply into mobile advertising, acquiring the companies Mobile Theory and 4th Screen Advertising, as it sought to increase revenue from ads on its Mini and Mobile browsers.

Opera also announced on Friday its results for the fourth quarter of 2012. Revenue came in at $60.7 million, up 39% from $43.5 million for the same quarter in 2011.

A bright spot for Opera was revenue from mobile advertising, which generated $19.6 million, up from $4.1 million a year before.

As far as the number of users of its browser software, Opera said it lost about 4% of its users on the desktop compared to the same quarter a year prior, down to 55 million. But the company said the total number of Opera users on mobile devices came in at 229 million, up 30% over the fourth quarter of 2011.

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