Monday, July 03, 2006

Opera Generates Huge Profits from Free software

Opera Software has launched version 9 of its browser, available simultaneously in 25 languages and for the three main platforms - Windows, OS X and Linux - plus other platforms. Despite the fact that it is free, the company is hugely profitable. New features includes widgets described as "fun, small and useful Web programs," similar to the widgets in OS X, and support for BitTorrent, the popular file distribution technology.

Opera started out as a research project in Norway's largest telecom company, Telenor, in 1994, and branched out into an independent development company named Opera Software ASA in 1995.

At one time it charged for its PC browser but with just about every other browser on the market available free, abandoned that approach. However despite the fact that its most popular product is free, the company in extremely profitable. For 2004 (the last year for which results have been posted to its web site, in generated a gross profit of around $US14 million on revenues of $US30 million.

The company has several main revenue sources. It licenses the browser to original equipment manufacturers (OEMs), such as Motorola, to operating system owners, such as Symbian and user Interface (UI)/middleware owners, such as Canal+. Since 2003 it has focussed on offering the browser directly to other players that are placed higher in the value chain such as mobile operators.

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