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Opera Seen as a Facebook Fit


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Opera Seen as a Facebook Fit

Business

Category: Technology

Shares in the mobile browser maker soared by as much as 26 percent on Tuesday. Tech blogs reported recently that it was in the sights of Facebook, which was criticized at the time of its $100 billion initial public offering for failing to have an effective mobile advertising strategy.

Opera’s Internet browser optimizes surfing on mobiles, which can be a slow and painful experience especially on more basic phones, and is especially popular in emerging markets.

Bankers said the company had long been up for sale informally but they ruled out rival interest from the likes of Google and Yahoo in the short term.

“The company has been available for a long time. Informally it is for sale,” one of the bankers said. “And Facebook wants to buy its way into the emerging markets.”

Another source familiar with the matter said it was unclear whether interest from third parties would ultimately result in closer partnerships or an outright takeover of Opera.

“Opera is attracting growing interest as mobile becomes more strategic for Internet companies, but there is no ‘For Sale’ sign up over the company,” the source said.

Opera currently benefits from partnerships with multiple companies including Google, which would be threatened by a takeover from a powerful rival such as Facebook.

“It’s a classic challenge for a company like this. They’re like the Switzerland of mobile. Someone would have to derive meaningful value to take them off of that independent path,” the sources said.

Facebook shares slid to a new low on Tuesday at just above $30, extending a losing streak since its controversial and glitch-ridden market debut on May 18.

Facebook is approaching saturation point in the developed world and says its next billion users will come from countries such as India and Nigeria.

Because many people in those markets own simple phones and do not have access to app stores, it is important for Facebook to make the experience of accessing the site through a Web browser as painless as possible.

Its chief technology officer, Bret Taylor, said in February that Facebook would lend its weight to a push for better Web standards that would enable more apps to be delivered via a simple Internet browser, instead of going through Apple and Google stores.

“On paper (a Facebook-Opera combination) is a good story. Opera’s browser is used in feature phones, not smartphones, mainly in the emerging markets,” a second banker said.

Opera, which has about 200 million subscribers to its Mobile and Mini services, has built a significant share in major emerging markets such as India and Brazil, which are strategic growth markets for Facebook.

Source: Reuters

Published: September 25, 2022