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Opera gulps Skyfire, takes aim at mobile data applecarts

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Opera has bought one-time competitor Skyfire, for $50m down with another $100m in performance-related bonus on the table. The idea is to get into cell-operator racks with a view to making mobile pay.

Under the deal, which should complete in a month or so, Skyfire will continue to exist as an independent product but as a division of Opera Software run by Skyfire's existing CEO Jeffery Glueck. The plan is to integrate the offerings as well as using Skyfire's presence within the network infrastructure to enable some of the more-interesting business models operators are keen to explore.

Both Opera and Skyfire do cloud processing, optimising content before delivery to a mobile device. Skyfire has been particularly focussed on video, but the two differ markedly in the way they make money from those services - although they've become closer as the years have gone by.

Opera makes money selling targeted advertising, which is dropped into browsing streams with the agreement of the content owner - so a site places a recognisable tag in their pages, and during the optimisation process Opera replaces it with an advert aimed at the individual doing the browsing.

That work is done by Opera's servers, but handset manufacturers (and operators making variants) can pay to have Opera Mini, or Mobile, installed on devices to improve the experience of their customers.

Skyfire does much the same thing, but makes the network operators pay for the optimisation servers, which are integrated into their network infrastructure and thus able to optimise the delivery of video to suit the unique network conditions, reducing network loading while improving the user experience to the benefit of all.

The content-optimisation business is crowded these days, with Amazon's Silk handling it for the Kindle. Dolphin is also still knocking around, and UC Browser is celebrating 400 million downloads, so there's clearly need for some market differentiation.

Opera is hoping to provide that by taking advantage of Skyfire's position inside mobile networks to innovate billing models - providing free access to specific sites or time-limited bundles. We’ve already seen the first signs of that, for instance with tariffs offering access to Facebook outside the data cap, and we'll likely see a lot more of it in future. The idea of buying, say, a YouTube app bundled with unlimited viewing might seem an obvious innovation but mobile operators have been surprisingly conservative in exploring new billing models.

It seems remarkable that there's no Evening/Weekend rate for mobile phone calls, or data. Orange did offer such a thing, briefly, selling a tablet computer with (properly) unlimited data off peak and the usual cap for daytime use, but the idea never took hold.

Opera will be hoping that hasn't put operators off, and that the market is ready for new ways to pay for bandwidth. With SkyFire acquired it's ready to enable those new models and stay ahead of the competition. ®

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