Opera Q2: Sales Up 32% To $52.1M; Mobile Surges, Desktop Flat, Google Deal Stays Put

Opera Software, the Norway-based Internet browser company, today reported Q2 2012 earnings that solidified the company’s strength in mobile, and ongoing weakness in desktop usage in the face of competition from Google’s Chrome and Microsoft’s Internet Explorer browsers: revenues were $52.1 million, up 32% on Q1 2011 and just about beating analyst expectations of $51.5 million. Within that, revenue from mobile consumers was up 168%, while desktop consumers were flat. Net income has dropped to $4.1 million from $5.1 million a year ago.

And while we still are hearing no more news on this rumored deal with Facebook, Opera had other (less exciting) news about another partnership with a Silicon Valley giant: it has extended its partnership with Google for it to continue being the default search option on both Opera’s mobile and desktop browsers.

Opera says it now has 200 million people using its mobile browser, a rise of 47% compared to Q2 a year ago. The company, which has in the past boasted about being the most popular mobile browser, has more recently seen competition from both Android and Apple’s iOS Safari browser. Among smartphones, is now in third position at 19% of the market, says StatCounter.

It comes as no surprise, then, that Opera wants to build on its mobile position through partnerships with the likes of mobile carriers. That initiative is seeing mixed results. Opera says users of its white-label carrier browser, plus those who co-brand with Opera Mini, now number at 39.8 million, growth of 145%, but revenues in that business were actually down by 24% to $10.4 million, with carrier licensing revenues up by only 3% to $9.2 million.

Opera has been signing deals with operators in less developed markets — deals with VimpleCom (Russia), America Movil (Latin America) and Airtel (India) together open Opera’s market potential to another 600 million users — so the idea perhaps is that even if Opera is making less money on these deals in the short term, they will benefit in the long run. In any case, operator deals is an area that Opera says it will continue to pursue.

In desktop, subscriber takeup remained flat. It stands at 55 million at the moment. Interestingly, Opera seems to be monetizing them slightly better (largely through advertising): sales were at $15.7 million, up 22% over last year. The company is not at all giving up on this space, it says: the emphasis looking ahead will be trying to build up browser usage in Russia/CIS, where it happens to already have some traction with consumers as an  alternative browser to Chrome and IE. At the moment, worldwide, Opera has less than 2% of desktop browser share.

Advertising — where Opera has made a number of acquisitions such as Mobile Theory and 4th Screen (Feb 2012) and AdMarvel (Jan 2010) — is proving to be an increasingly significant part of Opera’s business mix. Revenues in this area were up by 450% to $13.5 million, partly as a result of this inorganic growth. Impressions on its advertising network are not growing proportionately. They were up 92% on last year to 102 billion. That implies Opera is doing a better job monetizing that ad growth.

“Opera expects to generate meaningfully more revenue from this business in 2012 compared to 2011, as Opera ramps up revenue directly from advertisers and ad agencies via its mobile advertising network subsidiaries, Mobile Theory and 4th Screen Advertising, and capitalizes on AdMarvel’s strong position with premium USA publishers,” the company noted today.

Google default search deal. This is not a new partnership, but rather an extension, to 2014, of a relationship that has been in place since 2009, the company noted in a statement. Under the terms of the agreement, Google will remain in place as the default search option across all of Opera’s products globally — Opera Desktop, Opera Mobile and Opera Mini.

Financial terms of the agreement were not disclosed but Opera notes that it also includes “promotion of various Google products and services.” That looks like it may already be kicking off: in its quarterly results statement, Opera points out that one of its chief aims in the quarters ahead is to push its position as a browser on Android devices. If successful, that may impact Google’s browser share in the emerging markets where Opera does best — but that might be a tradeoff worth making: Google could still end up picking up more Android users, who would still be bringing in search traffic through the Opera browser partnership.