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Opera Software Corporate Overview

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					Opera Software: Corporate Overview
              August 2011
Overview




           2
                            Opera
                            for desktop


Opera Mobile   Opera Mini




                             Opera for TVs




                                             3
             Opera at a glance: Key Assets


               • 200 million+ active monthly                 • Browser UI easily
                 browser users, with strong                    customizable for almost any
                 presence in emerging                          internet connected device,
                 markets                                       including PCs, mobile
 Extensive     • Agreements with 13 of top 30    Unique        phones, and ConnectedTVs
Distribution     global operators                Product     • Browser continues to be a
               • 100 million+ annual                           critical door/portal for
                 shipments with mobile OEMs                    consumers, mobile operators
               • Leading browser vendor in                     and publishers
                 Connected TV space


               • Diversified revenue streams                 • Unique proxy-based
               • Significant growth expected                   browsing technology enabling
Attractive       with consumers, operators                     accelerated and cheaper web
Business         and publishers                  Superior      browsing for consumers
Model and      • Attractive prospects           Technology   • Compatible with 80% of
                 particularly within the high                  mobile and 100% of desktop
 Growth
                 growth emerging markets                       devices
Prospects
                                                             • 500 engineers around the
                                                               world




                                                                                              4
   Opera at a glance: 200 million+ monthly
            active browser users*

 Opera Active Monthly Users                              Monthly active users (mm)*

  250                                                    800

                                     Mobile + Devices    700
  200
                                                         600

                                     Operator
                                                         500
  150                                branded Opera
                                     Mini
                                                         400

  100                                Opera branded
                                     Opera mini          300

                                                         200
   50
                                     Desktop
                                                         100

    0                                                        0
            Active users (mm)


* Excludes non-Opera users via Opera’s publisher solutions


                                                                                      5
       Opera at a glance: 2Q 2011 Financial
                   Performance
 Metric                                                                             2Q11                      2Q10                  Change
                                                                                                                                      %
 Revenue (MNOK)                                                                    214.8                     168.9                      27%
 EBIT (MNOK)                                                                         44.5                      28.8                     55%
 Adjusted EBITDA ** (MNOK)                                                           56.1                      38.2                     47%
 Adjusted EBITDA Margin**                                                          26.1%                     22.6%                      16%
 Operating Cash Flow (MNOK)                                                          19.8                      62.3                    -68%
 Free Cash Flow (MNOK)                                                                3.5                      54.9                    -94%
 Opera Mini Operator users (mill)*                                                   16.2                       4.5                    260%
 Total Opera Mini***                                                                  63                        35                      80%
 Desktop users (mill)*                                                                55                        46                      20%
 Opera Mini B2C users (mill)*                                                        115                        59                      94%
*June 10/June 11,
** Non-IFRS EBITDA, excluding stock option costs
*** Includes all revenue from all revenue types rom all versions of Opera Mini (Operator branded, Operator-Opera co-branded, and Opera branded).

                                                                                                                                                   6
                                                        Unique users
                                                                                   100




                                                                                         Millions
                                                                                   90
                                                                                   80
                                                                                   70
                                                                                   60
                                                                                   50
                                                                                   40
                                                                                   30
                                                                                   20


Number one                                2006   2007   2008   2009    2010    2011
                                                                                   10
                                                                                   0



     mobile                                               Page Views

browser WW                                                                          60




                                                                                          Billions
                                                                                    50
   21.9% market share                                                               40

                                                                                    30

                                                                                    20

                                                                                    10

                                                                                    0
                                          2006   2007   2008    2009    2010    2011


        Source: Statscounter April 2011
                                                                                                     7
Unique Value Proposition: Smart browsing
           Proxy/server based

                              • Opera hosts an infrastructure of web servers that
  Small screen
                                pre-load webpages and compress data prior to
   Opera Mini
                                transferring it to devices
                    90%
                 compressed   • As a result data transferred is reduced by up to
                                90%




                                   Opera Server
                                   Transcoding
                    80%
                 compressed        Compression




                                                                        Internet
                                Opera Mini server

  Large screen
  Opera Turbo



                                                                                    8
                        Download from
                          opera.com




Distribution: every platform, every OEM, every store, every
operator   and opera.com                                      9
                   Opera at a glance: Strategic Framework*
  MONETIZATION




                                                                                 Active
                                          Rev                                                      Transaction
                       Ads                                  Search               User
                                         Share                                                        Fees
                                                                                 Fees
SERVICES
 CLOUD




                                                                                                                New
                   Apps store           Portal          Browsing         Messaging          Payment
                                                                                                              services
  CUSTOMERS




                  Operators                             Consumers                          Publishers


                 * Business and revenue models for Device and Mobile OEMs: License/shipment, NRE and M&S based.


                                                                                                                         10
 Opera at a Glance: How Opera generates
                 revenue


                                        Total Revenue

                                                  Mobile/Device             Opera Mobile
  Desktop                  Operators                                                                   Publishers
                                                     OEMs                    Consumers



          Users                    Users                   Licenses                    Users                 Net eCPM



                                                                                                                Ad
          ARPU                     ARPU                   NRE/M&S                     ARPU
                                                                                                            Impressions

          55 mm                   17 mm                     25 mm                      113 mm
          users*                  users*                    users*                      users*
* Only Opera users. Opera Mobile users only includes Opera Mini users and excludes co-branded Operator users. Opera
Mobile users are included under OEMs. Revenue model for Mobile and Device OEMs is License/shipment based.

                                                                                                                        11
  Major global industry trends that impact
                   Opera

                                  Social,Local,
                                    Mobile,
                   Rapid Growth     Gaming        ConnectedTV
                    of Open OS                    Market Taking
                     Platforms                        Off


      Massive                                                     Tremendous
     Adoption of                                                   Growth of
       Mobile                                                     Mobile Ads +
      Internet                                                       Search




 Operators                         Opera’s                            Explosion in
 Need New
Data Services                      Industry                           Use of Mobile
                                  Opportunity                             Apps
and Revenue




                                                                                      12
                                        Opera’s revenue opportunity
1.5 billion new subscribers expected to be added by 2014                                                    Operators Have Very High Focus on New Data Services
        Emerging markets (m)                          Developed markets (m)
   7000                                                                                                        Data ARPU -USA (USD)              Voice ARPU -USA (USD)
                                                                                                            $ 60
   6000
                                                                                                            $ 50
   5000
   4000                                                                                                     $ 40

   3000                                                                                                     $ 30
   2000                                                                                                     $ 20
   1000                                                                                                     $ 10
      0                                                                    2011E
                                                                                                             $0
            2002
                   2003
                          2004
                                 2005
                                        2006
                                               2007
                                                      2008
                                                             2009
                                                                    2010


                                                                                   2012E
                                                                                           2013E
                                                                                                   2014E
        Strong Growth Expected in the Future                                                                 700 million new desktop internet users expected by 2014
           Flat screen TVs (mill)                                   Internet TV (%)
                                                                                                                             Users (mill)             Desktop penetration
 300                                                                                               100 %    45 %                                                            3 500
                                                                                                   90 %     40 %                                                            3 000
 250                                                                                               80 %     35 %
                                                                                                   70 %                                                                     2 500
 200                                                                                                        30 %
                                                                                                   60 %     25 %                                                            2 000
 150                                                                                               50 %     20 %                                                            1 500
                                                                                                   40 %     15 %
 100                                                                                               30 %                                                                     1 000
                                                                                                            10 %
  50                                                                                               20 %      5%                                                             500
                                                                                                   10 %
                                                                                                             0%                                                             0
    0                                                                                              0%
          2009      2010 2011E 2012E 2013E 2014E
                                                                                   Source: Morgan Stanley, Pyramis Research, GS Statcounter, Opera Software
                                                                                                                                                                                    13
Connected TV Market: Future is the Full Web and
                Applications



                        Me
                                             Close Tab
                        nu




                             Full web




           Broadcast/                                    Widgets and
           Broadband                                     Web applications


                                 Portals
                                 Services
                                 EPG
                                 Device UI




                                                                            14
Opera’s revenue opportunity: Consumers & Publishers

    Mobile Browser Users Expected to Increase Rapidly                   Mobile advertising revenue to hit USD 24B by 2015
      Mobile browser users (m)
                                                                                         Mobile Advertising (BUSD)
      Mobile browser users % of total Internet users
 1800                                              60 %               30
 1600                                              50 %               25
 1400
 1200                                              40 %               20
 1000                                              30 %
  800                                                                 15
  600                                              20 %               10
  400                                              10 %
  200                                                                   5
    0                                              0%                   0
                                                                                        2010                           2015E


Mobile Applications Revenue to reach USD 58B by 2014           Over 1 billion Open OS shipments expected in 2015
 70                                                                         Other Operating Systems                  Android
 60                                                                         Microsoft                                iOS
                                                                            RIM                                      Symbian
 50                                                                         % of total market
                                                                 1200                                                                     50 %
 40                                                                                                                                       45 %
                                                                 1000                                                                     40 %
 30                                                                                                                                       35 %
                                                                   800
 20                                                                                                                                       30 %
                                                                   600                                                                    25 %
 10                                                                                                                                       20 %
                                                                   400                                                                    15 %
  0                                                                200                                                                    10 %
                                                                                                                                          5%
                                                                      0                                                                   0%
                                                                               2010           2011E           2012E            2015E
                                           Source: eMarketer, Juniper, Morgan Stanley, Gartner, Informa Telecoms & Media Opera Software
                                                                                                                                           15
        High Growth Markets Offer Interesting Opportunities
Emerging Markets Will Drive Subscriber Growth
and 3G penetration is expected to be < 50% in 2014 Overview of Opera Mini Users (July 2011)
             Mobile subscribers emerging markets (mill)
             Mobile subscribers Developed markets (mill)                             % of Opera   Opera
             Weighted BRICIS 3G penetration                  Country    Users (mill)   users    Marketshare
 7000                                              100 %
                                                   90 %       Russia        21          17 %       66%
 6000
                                                   80 %     Indonesia       19          16 %       55%
 5000                                              70 %
 4000                                              60 %       India         18          15 %       52%
                                                   50 %    South Africa      4           3%        68%
 3000                                              40 %
 2000                                              30 %       China          3           2%         2%
 1000
                                                   20 %       Brazil         3           2%        24%
                                                   10 %
    0                                              0%
            2012E
            2013E
            2014E
            2011E
             2007
             2002
             2003
             2004
             2005
             2006

             2008
             2009
             2010




                                                             BRICIS         68        55 %         46%

Opera revenue distribution 2Q11*                             Key Characteristics of Emerging markets
                                                             which favor Opera:

                                             Developed        Strong market position today – great
                          48 %               markets         platform for further growth
          52 %                               Emerging         2G will continue to prevail (slow networks)
                                             markets          Clear dominance of variable versus fixed
                                                             data plans (cost savings matter)
* Opera estimate
                                                                                                         16
Operators
and Mobile
and Device
  OEMs


             17
Opera’s revenue opportunity: Major mobile operators
             Mobile subscribers                                                                Mobile subscribers
            Emerging markets HQ                                                               Developed markets HQ
                                   Turkcell; 61
                                                                                                  TelecomItalia/TIM;
                                      Maxis; 64 Qtel; 60
                                                                                                         72
                Idea Cellular; 84                                                                               NTT Docomo; 56
                       Tata; 86
                BSNL; 89

       Telkomsel; 100                                                                                Verizon;
                                                            China Mobile; 601                          90
                                                                                                                                 Vodafone; 341
  China Telecom; 94                                                                            AT&T; 98


                      MTS; 103
                                                                 America Movil; 225
                      Reliance; 129                                                         TeliaSonera; 160

                                                                                                                                      Telefonica; 290
                       Etelisat;                                       Airtel; 199
                         135                                                                 T-Mobile; 151
                             MTN;
                             150
                                            China
                                           Unicom;          SingTel;       Vimpelcom; 181
                                             170              175                                         Telenor; 230      Orange; 210
                 Saudi Telecom
                 Company; 100
                                                  Axiata Group
                                                  Berhad; 160



                                   Opera working                                                               Opera working
                                   with 6 of 20                                                                with 7 of 10
                                   opcos today                                                                 opcos today

   Top 30 operators have nearly 75% of global mobile subscribers.
   Opera already has agreements with 13 out of top 30 operators globally, which
   comprise over 1.7 billion subscribers or 30%+ of the market
                                                                                                                                                        18
operator growth
4.5M      16M
  users in 1 year




                    19
                    Data plans
        Mobile store
   Existing users   Content sales
       Reduce churn           Network cost
Zero rating Grow users

                           why do Operators
                    work with Opera?

                                             20
Co-branded splash                  Operator Logo


 Start-page links
 Dynamically updated every month




Speed Dial
3 Speed Dial slots defined by
Operator



 + Account Information Forwarding
 + Zero Rating



                                                   21
    used for
promoting
    content




               22
Opera’s opportunity: increase users within the Operator
                       segment

                    34% potential global
                           subs                  1.0% conversion



  5 Billion subscribers
  • 750 operators               1.7 billion
  • 190 countries               subscribers
                                                         16.8 Million
                                • 26 operators           Subscribers




                                                         Opera
                                                         Operator
                                 Total subscribers of    Active users
                                                         Today
                                   Opera Operator
                                      customers
     The market
                                                                        23
2010: Opera shipped on more than   100,000,000 phones   24
 top device
     OEM
customers
   since 2010


            2010

                   25
                            Full Internet browsing




  TV Apps UI &
execution engine
                                                     use
                                                     cases
                                   Device UI




      Broadcaster Portals      IPTV Middleware UI
        HbbTV, iPlayer

                                                             26
Consumers
   and
Publishers



             27
 Opera Mobile Browser Market Share: July 2011

  Mobile Browser Market Share – July 2011
          Samsung; 1 %          UCWEB; 1 %
                                      Other; 6 %
             NetFront; 4 %
   iPod Touch; 5 %
                                                         Opera; 22 %




            Android; 18 %
                                                                   iPhone; 15 %



                       BlackBerry; 12 %
                                                   Nokia; 17 %




Source Data: Stat Counter July 2011


                                                                                  28
                  Revenue Opportunity:
          Opera-branded Opera Mini User Growth

130 000 000
120 000 000
              Monthly users             •   Growth continuing
110 000 000                             •   High focus on
100 000 000                                 converting users
 90 000 000                                 to operator-
 80 000 000
                                            branded or co-
                                            branded revenue
 70 000 000
                                            generating users
 60 000 000
 50 000 000                             •   High priority of
 40 000 000                                 new Consumer
 30 000 000
                                            Mobile team:
                                            Increase ARPU on
 20 000 000
                                            100% Opera-
 10 000 000
                                            branded users
         0
              Jan-11




              Jun-11
              Jan-09




              Jun-09




              Jan-10




              Jun-10
              Feb-09




              Dec-09

              Feb-10




              Dec-10

              Feb-11
              Aug-09
              Sep-09




              Aug-10
              Sep-10
               Jul-09




               Jul-10




               Jul-11
              Apr-09




              Oct-09




              Apr-10




              Oct-10




              Apr-11
              Mar-09




              Nov-09




              Mar-10




              Nov-10




              Mar-11
              May-09




              May-10




              May-11




                                                          29
    new Opera
services will
enhance offering
and valuable real
       estate for
       Opera’s
       content
      partners

                    30
Opera Mobile Store:
One of the largest app
stores in the world
   • 700,000
     downloads/day
   • 20 million unique
     users/month
   • Unique
     differentiator:
     delivers apps to
     any
     platform/device

                         31
      Opera Mobile Store: At a Glance


                                                                      Your
                                                                     Brand

   Complete         Storefronts for all                          Partner-Branded
                                          Over 30,000 partners
   Ecosystem        major mobile OS                                storefronts




                      $$$
Database of over    Data Usage, Ad &      Content, Language &    Expertise to drive
 2,500 phones      Premium Revenues           Currencies            downloads



                                                                                   32
Start/Home Page: Opera Content Partners
                       Speed Dial partners

                       • Financial Commitment
                       for the promotion of their
                       brand/content/services/site
                       s

                       • Monthly minimums +
                       revenue share

                       Distribution partners

                       • Co-promote products
                       and services



                                                     33
              Opera for
              desktop:
          55 million users
The leading alternative browser in
                    many markets

Strong revenue growth
                   High margins
                  Growing ARPU


           Differentiators:
                          Speed
                    Opera Turbo
                  Customizability
                      Navigation



                                34
     Opera Desktop: Revenue and Users
80                                80
      Revenue MNOK                             Monthly users (Mill)
70                                70

60                                60

50                                50

40                                40

30                                30

20                                20

10                                10

0                                   0
     1Q11
     2Q11
     1Q07
     2Q07
     3Q07
     4Q07
     1Q08
     2Q08
     3Q08

     1Q09
     2Q09
     3Q09
     4Q09
     1Q10
     2Q10
     3Q10
     4Q10
     4Q08




                                        1Q11
                                        2Q11
                                        1Q07
                                        2Q07
                                        3Q07
                                        4Q07
                                        1Q08
                                        2Q08
                                        3Q08
                                        4Q08
                                        1Q09
                                        2Q09
                                        3Q09
                                        4Q09
                                        1Q10
                                        2Q10
                                        3Q10
                                        4Q10
             Quarterly revenue & users trend last 4 years             35
                     Opera Desktop: Overview

•   Lightning fast
     •   Everything from loading
         webpages to opening tabs is
         optimized to happen almost
         instantly.

•   Safe and secure
     •   Your safety is ensured by
         industry-leading security,
         Fraud and Malware Protection
         and an address field that
         clearly shows your security
         level.

•   Powerful features
     •   Opera has more features built-
         in than any other browser. You
         can also add new functionality
         with extensions.




                                               36
Opera Desktop: Overview
Bing     •~55 million monthly active users
Yandex   •Opera monetizes through search and
Baidu    content partnerships

                                 Google
                                 Ebay
                                 Amazon




                                               37
partners can
dynamically control
how their
websites appear
in the browser
homepage




                      Show off your brand   Show off your products




                                                                     38
                   Opera Publisher Business

                    Mobile advertising and analytics

Platform & tools to make mobile advertising work
• Market leading ad serving, campaign management, targeting and reporting

• Global ad Mediation from 80+ ad networks and agencies around the world

• Ad solutions for SMS, mobile Web, in-application and widgets

• 20B+ Ad transactions/month, 6300 sites and applications, 40M+ unique users




       Mediation   Ad Serving   Trusted Broker   Traffic Mgmt   Campaign Mgmt   Analytics


                                                                                            39
              Admarvel’s place in the ecosystem
               Brands that want to
Brands and     expose themselves to
Agencies       consumers; agencies
               design and deploy for
               advertisers
Mobile Ad      Create a marketplace
               where publishers and
Networks       providers can sell
               inventory

               Provide mediation,
Ad Platform    analytics and targeting
               to drive performance


               Own the ad real estate
Publishers     and entice consumers to
               interact with ads



Content        Provide the technology
Delivery       necessary to deliver
Systems        marketing campaigns


                                         Trusted Broker
               Deliver advertises to
Carriers       consumers; hold
               consumer profile info



Consumers


                                                          40
Sample Publisher Customers




                             41
         Diverse solutions and partners


    Mobile Web




Ad sources (80+ ad networks and agencies)




                           …
                                            42
      Opera Open Mobile Ad Exchange
Open Marketplace for Publishers &
Advertisers
• Bid/Ask auction
• Ad mediation &traffic management
• Campaign management, ad serving &
  targeting
• Analytics




                    Opera Confidential   43
        Opera Open Mobile Audience Network
Provides the intelligence necessary to better understand and monetize
mobile properties
• Multi-dimensional segmentation
• Real time intelligence for targeting
• Analytics dashboard for mobile advertising
• Key insight into content, trends, preferences
• Aggregated data – protecting user privacy



Publishers
                                                     Advertisers
        Understand traffic patters – by geography,
        devices, demographics                                Understand where to reach
                                                             target audience
Mobile Operators
                                                             Gain insight using correlated
        See and also enrich audience data
                                                             data
        On-deck and off-deck monetization


                                                                                             44

				
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