The three ways in which the Opera browser makes money

Opera Mini

The Norwegian company Opera Ltd, known for being responsible for the Opera browser , has decided to go public in the United States to try to raise up to 115 million dollars. In the document that it has presented for its IPO we can see interesting data, such as that they generated 128.9 million in operating income, which allowed them to have net income of 6.1 million dollars.

But the most interesting thing is that Opera has specified how it earns that money with a free browser. We could say that it only has three sources of income, which are its deals with search engines, ads and licensing deals. The company itself admits that a small number of business partners contribute a significant portion of its revenue.

Search engines are its fundamental pillar

Opera Mini Search Engine

Of Opera's three sources of income, the most important is from its deals with search engines . Yandex is the default search engine for users in Russia, and Google is the one they use in the rest of the world, so when users search in the browser's address bar, they will use these engines unless they manually configure alternative ones .

And companies pay them to be their default search engines . This type of arrangement is common among browsers, and search engines pay more or less to stay as the default depending on how many users each browser has.

In the case of Opera, Google and Yandex generated approximately 56.1% of all their profits in 2017. That means that more than half of Opera's profits are made by only two companies , with Google accounting for 43.2 % of all its profits in 2017 and Yandex 12.9%. In addition, in the first quarter of 2018 these two companies once again accounted for 51.3% of their income.

But at Opera they are also aware that this dependency makes them weak , and in the document they point out that these agreements with both companies are subject to change. They also say that if any of them decided to invest less in Opera, and they fail to secure new deals to compensate, their financial results could be "adversely affected".

Advertising counts too.

The other great fundamental pillar of Opera is advertising. When you install the browser you will see that a series of bookmarks are configured by default , which are direct accesses to companies such as, Amazon, AliExpress or eBay. That's because these companies are also partners of Opera, and they pay them depending on the visits or purchases that their users generate.

In addition to the bookmarks, we will also see the ads in the quick access , which are those direct accesses to web pages that appear in small boxes on the home page that you go to by default when you open a tab. The browser earns revenue from transactions initiated by its users directed through links on that home page.

Opera also has a news feed, a section in its left column called Personal News , and the media featured in it also pay a small fee. These are also considered advertising revenue, although as in the case of quick access or bookmarks, users have the option to delete all of them to configure it as they wish.

In the first quarter of this 2018, advertising revenue accounted for 32.7% of the total achieved in that period of time. Taking into account that in the same quarter of 2017 advertising accounted for 28.3% of its income, we see how it is a source of income with increasing importance for the company.

The browser company says in its pre-publication document that it collects usage data from its users . However, they declare that this data is being used internally, to better understand how their users behave and offer them services more tailored to what they might need.

And then there are the distribution licenses

And the third fundamental pillar of Opera is in its distribution partners, which are generally manufacturers of mobile devices. Opera says in the document that it has deals with as many as 35 device and chip makers around the world , as well as several telecommunications companies.

With them, Opera makes money by licensing its software to them. In other words, these companies usually pay a small amount of money to Opera in exchange for permission to install their browser on the device. Among the manufacturers with whom they have agreements there are names like Samsung, Huawei or OPPO.

In the first quarter of this 2018, revenue from licenses and others accounted for 16% of the total achieved in that period of time. Taking into account that in the same quarter of 2017 it accounted for just 11.3%, we also see that its importance is increasing. This is good for Opera, because the more the weight of licensing and advertising deals rises, the less dependent it will be on search engines.

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