Competing With Google Isn’t Scary When You’ve Done It Before

(Bloomberg) -- Fighting the dominance of Google, Microsoft Corp., and Apple Inc. is a battle many smaller companies lose. But for Jon von Tetzchner it's ground well-trodden.

The Norwegian entrepreneur co-founded the company that developed the Opera web browser in the mid-1990s – then competing with Microsoft's Internet Explorer, and industry leader Netscape Navigator – which made its debut on the Nasdaq Global Select Market last week.

After leaving in 2011, when Google's Chrome had already taken about a quarter of the global market, he set up Vivaldi Technologies AS in 2014, hired former Opera staff, and built a new web browser to plug a gap he felt his previous creation no longer filled.

“Opera had gone in a different direction,” von Tetzchner said. “After I left the company, they basically threw away the code and decided to kind of start fresh and go the same direction as everyone else, making browsers that were more limited.”

Limited aesthetically, perhaps. But underneath, modern web browsers have morphed into powerful and crucial gateways to the world's digital information that generate billions of dollars in annual revenue. Google built an operating system, Chrome OS, based on the idea that a browser can run complex software programs only supported by powerful computers in the past. Apple's Safari and Mozilla's Firefox browsers can also handle bulky tasks like streaming video, file-transfer management, digital photo editing, and 3-D video games.

These platforms let users add new features by downloading third-party extensions to add even more functionality, such as advanced privacy controls, bargain-finding shopping tools, and language translation. But with mainstream browsers prioritizing accessibility over the inclusion of advanced built-in feature sets, von Tetzchner said, the opportunity exists to be unique in the market with increased out-of-the-box functionality.

“We put in anything that our users ask for,” he said. What happens a lot with other browsers, he said, “is that anything that isn't getting a significant amount of use gets removed, and eventually you end up with very limited products because of that. Our thinking is the opposite.”

Google's Chrome browser used to have a built-in app store, but Google removed that feature in 2017 after saying in 2016 that only about 1 percent of desktop users took advantage of it, and that standard web technologies had progressed to the point that rendered them less necessary. In contrast, Vivaldi has added features not commonly seen in competing applications, such as the ability to control Philips Hue smart lightbulbs directly from the software.

Building a browser that grabs even a sliver of the market can be highly lucrative. That gives Vivaldi a chance. Search engines, and Google in particular, pay to be the default when people launch with browser. It's big business: Google accounted for 43 percent of Opera's 2017 operating revenue of $128.9 million. Vivaldi also charges some businesses to be featured as default “bookmarks,” meaning their websites are presented to new users as suggested destinations when the open the browser.

Von Tetzchner is confident his experience in the market gives Vivaldi leverage. A recent legal decision could help, too. In July, Google was handed a $5 billion antitrust fine from the European Commission for strong-arming Android device makers into pre-installing its search engine and Chrome browser on their gadgets. The regulator ordered Google to stop the practice. This gives other browsers the chance to be the default when people pick up their smartphones to go online. 

“It's really positive that the commission is looking at those things,” von Tetzchner said.   

When the EU settled with Microsoft in 2009 over the company's bundling of Internet Explorer browser with the Windows operating system, Microsoft agreed to let consumers choose which browser to install. Google Chrome's success has been linked to this regulatory action, by some in the internet business.

“It impacted their behavior for a while,” von Tetzchner said of the case. “I think that's probably more important than anything.” 

Vivaldi doesn't yet have a mobile version of its browser, but von Tetzchner said it's being developed.

To contact the editor responsible for this story: Alistair Barr at abarr18@bloomberg.net, Giles Turner

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