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"We Are Proud Of Our Position In Emerging Mkts"
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Opera recently purchased Handster (a white-label mobile app store). What benefits did the acquisition bring to Opera, given that you already ran an existing app store with Appia?
We think it is very important for us to have our own app marketplace, beginning with our own storefront in the mobile space, and then on the desktop and TV in the future. In the long term — the move will be from native apps — those that run solely on one platform or the other (like Android or Java apps), to web apps that run across all devices. When that happens, we need to control our own app store, which allows developers to come in with their apps, and just tick off the platforms they want their apps to be made available for:TV, cars, mobiles, everything that is running Opera code. We're the only ones at the moment who can offer such a cross-platform offering.
Speaking of web apps, Opera has long been a strong proponent, pretty much spearheading the initiative. How far away are we from a pure-web apps store, given how popular native platform specific applications are at the moment?
It's very hard to say, because when we started making mobile browsers, we thought they were two years away, and it ended up taking 10 years before mobile browsers really took off. It took Steve Jobs and the iPhone to make mobile browsing what it is today. That said, where we are today, with the Internet, if you make the products compelling, people will start using it — it all comes down to the user experience. We're excited about increased HTML5 acceptance (more so with the recent developments around Adobe Flash), and things are moving much faster than we anticipated, even if we compare them what they were like to 6 months ago, but I can't say when it will reach a critical mass. For the time being, our app stores will feature native apps and web apps - that is today's market, but we will spearhead the transition to a web-apps based world.
Revenues are up, as are profits. What specifically are you doing to increase your ARPU (average revenues per user) figures?
The last couple of years have been great for us at Opera, with a very scalable revenue and profit model. Back in '99, we were losing money, with most of our revenues coming from customised browsers for phone manufacturers such as Samsung and HT. That business just disappeared with the iPhones and Androids. We were left with a desktop product generating revenues mainly from search tie-ups and content partnerships. Today, it's different, we're more focused on making great consumer products, no more consultancy work, and that's something we learnt the hard way.
Of course, I have to mention two great things that have happened for us when it comes to revenue and how we scale our business. First, we managed to leverage on the success of Opera mini through operators. Most operators started realising that data traffic on their network was up by almost 50 per cent due to one application called Opera mini. And so if you look at Russia, India and other emerging markets, we have signed 50 operator agreements in the last 18 months, something many other software companies can only dream of doing with so many telcos. Plus we're helping them fight Apple and Google taking over their users. The other factor is TV, which has been very scalable and profitable business for Opera. It's also a market where we are very ambitious going forward because we see where we failed with the desktop where we had great technology but never enough user uptake. With TV, there is no real Apple, Google competitor offering yet, and it's only a short matter of time before we get there. TV operators are asking us to build a platform they can ship, and we're the only one who have app store, advertising and payment technologies in place to make this happen.
You spoke about your desktop presence, where your competition has often out noised you and the product has languished, especially if you compare it with your mobile browser growth rates. Is it still a priority, your desktop browser?
I think we need to be realistic about it. While we've done some fantastic innovations in the desktop browser space, things like speed dial, tabbed browsing, a mail client within the browser, it really hasn't been driving growth for us. Yet, if you take India for example, where we are very strong on mobile and are seeing fantastic growth, crazy growth almost. It is here where we believe there will be a spillover from mobile to desktop, with users looking for the same experience on their desktops that they see all day on their phones. In addition, unlike Russia, where we integrate our mail client with the most popular mail services, in India we believe a lot of people will not have got their first mailbox yet, and we want Opera to be that mailbox.
With their recent Kindle launches, Amazon launched the new Silk browser, which is seen as homage to Opera mini's technology of compressing data in a server before it reaches your mobile web browser. Yet, as networks improve and 3G gains acceptance, do you see your star product Opera mini becoming redundant?
Let's look at it this way, we have Opera mini (not the full fledged Opera Mobile browser) on the iPhone, which is widely used in developed markets, but we still have 3-4 million folks using Opera mini on the iPhone, primarily because it is fast when compared to the default browser. And remember, there are still a lot of bad networks out there, even in the US, and our intention for the future is to have a seamless mixed model — where you can get full fidelity on your mobile browser on a good network, and server compressed 'mini mode' on slower network. I think the merging of the Opera mini and Mobile browsers will be a killer feature, possibly as early as early 2012.
Can you speak to your partnerships and presence in India?
There's a fantastic growth story there, we have grown from 1 million to more than 20 million users now in India. Even compared to two years ago we are probably embracing the fact more that India is our biggest market, because in the past we spent a lot of time on getting a position in the US. Today, we are proud of our position in emerging markets, and we're finding new ways to monetise the business each passing month. Speaking specifically of local partnerships, we are working with Vodafone, and conducting some serious pilot testing with some other big operators in India. With our team on the ground, we are also dealing with all the local regulations like lawful intercepts, which involves putting our servers into India. Essentially, we are really trying to speed up our investments into India.
Where does Opera go next? What is the next inflection point for the company; areas that you foresee possibly going well the next few years that you haven't actually dealt with in the past couple of years?
We're betting heavily on HTML5 becoming the dominant platform, and while Google and others are involved, we really try to be in the front seat. That is very important for our cross platform offering. As I said, we're very ambitious on TV, where we want to build a platform for TV manufacturers and TV operators, so they have something more compelling when Google and Apple arrive in the market. We're working on the app store and some other features on the TV platform that the world hasn't seen yet, so we're very excited by that.
With regard to mobile and desktop, we may be a little more realistic going forward, focusing on browser features and then on integrating popular local services. There are a lot of content and third party services which are very popular in India but the big guys only want to push their own services, so we think that's a nice way to compete with them.
You will be completing 2 years as CEO in January 2012. How has the journey personally been?
It's been great. Of course, it was a little bit unexpected that I had to take over, and I took over at a point when we were in a difficult position, with slow desktop growth and little or no revenues from mobile or TV. We were forced into restructuring the company; we stopped our consultancy business, instead focusing all our engineering resources into making great consumer products. Then we saw major success with Opera mini, and started monetising this through operators and third-party content providers. And with the position we are in the TV space, we now have three legs to stand on today compared to one leg 18-20 months ago.