Maureen O'Gara

Norway’s Opera Software is pushing its mobile widgetry beyond the browser with its acquisition of five-year-old Silicon Valley-based Skyfire Labs, whose video-optimization and smartphone monetization products will be added to its operator business unit.

Skyfire also has its own mobile browser extension called Skyfire Horizon that operators can customize and use for promotions and advertising.

Opera estimates it’ll spend about $155 million in cash and stock on the deal.

It involves a upfront payment of $50 million including the $8 million in cash on Skyfire’s balance sheet and performance-based earn-outs over three years including $26 million in cash held in escrow that can bring the whole deal to $155 million.

Skyfire is known for its Rocket Optimizer software, which lets mobile operators leverage cloud computing to optimize virtually any video or other multimedia on crowded cell towers, including 3G and 4G LTE networks.

It’s got three large unnamed American mobile operators as customers, and is in trials with 10 other foreign operators.

The widgetry is supposed to provide mobile networks a 60% boost in capacity by reducing the size of video and other multimedia content to fit the available bandwidth. Skyfire is also said to detect when specific users face a poor experience or connections that need assistance, and intervene in milliseconds.

Opera figures the technology aligns with the trend toward software-defined networking (SDN) and network function virtualization (NFV) among telecommunications operators because of its elastic and virtualization- friendly cloud architecture.

Opera CEO Lars Boilesen said, “Opera and Skyfire are a natural fit. Both companies have evolved far beyond their browser roots. Skyfire adds capabilities to our portfolio around video, app optimization, smartphones and tablets, and strength in North America. With video expected to consume over two-thirds of global mobile bandwidth by 2015, and as time spent on

Android and iOS apps explodes, we are excited to extend Opera’s solutions for operators.”

Skyfire hopes to capitalize on Opera’s 100-odd carrier relationships – not to mention its advertising unit.

After the deal closes its CEO Jeffrey Glueck will be EVP of Opera’s operator business as well as CEO of a free-standing Skyfire and oversee the pair’s joint offerings due out later this year.

They’re looking to expand on Opera’s Web Pass offering, which lets consumers buy data plans such as unlimited ‘day passes’ of popular apps and web sites for an affordable price thanks to video and data optimization.

Opera says WebPass can enable new business models for operators, such as toll-free data and ad-supported data.

The acquisition should close in the next month. Skyfire brought in close to $41 million in venture financing from investors including Verizon.

By the way, Opera is also dumping its own browser engine for the open source WebKit used by Google and Apple.