Haavard

Slashdot and other media misrepresenting Opera's third quarter results.

Monday, November 15, 2004 3:24:00 PM

A recent Slashdot story on Opera seems to indicate that we are in trouble because our third quarter report showed red numbers. It goes on to say how Firefox could threaten Opera, being free and all.

What most of the Slashdot comments don't seem to reflect is the fact that our revenues are higher than ever, and still growing. They don't seem to understand that Opera has been around for nearly a decade, and that free browsers have existed all along without Opera going out of business. Also, Opera is actually a free download. You can use it completely for free in ad-sponsored mode.

I think the Slashdot story kind of show the way that big headlines are made, but they don't always reflect reality. While the numbers were in red in Q3, as opposed to the first half of the year, this is a result of the company rapidly expanding to keep up with demand for our products. We have had to hire a lot of new people to be able to deliver products, and this is actually a good thing. So it might lead to a slight loss in Q3 and possibly Q4 of this year, but the return should more than make up for this.

It is odd how many newspapers and the Slashdot story focus on the weak dollar and marketing as our primary explanation for the loss, when I think the Q3 presentation made it pretty clear that it was primarily because we are hiring, but that there are other contributing factors as well. I guess explanations that make sense often don't make the best headlines...

I can assure everyone that everything is going according to plan, and that this was a strategic move to secure future revenue. Opera is not going away any time soon.

If you'd like to see the numbers for yourself, such as the growing PC and mobile revenues (despite what recent articles and Slashdot postings may have you believe), have a look at the third quarter report for 2004.

In other news, new Opera 7.60 previews are available for testing, with voice browsing and a more streamlined user interface, and www.opera.com has gotten a facelift.

Opera 7.60 preview 1Sticky: About this blog

Comments

skydart # Monday, November 15, 2004 3:24:00 PM

Thank you for setting the record straight, Haavard!

Rijk # Monday, November 15, 2004 3:24:00 PM

Another way of looking at it: Opera has got 234307000 in cash, due to the IPO and the legal settlement earlier this year. With a quartely negative cash flow of -689000 like this third quarter, we can last 340 months, or 28 years

Methinks the increase in personnel will make increased sales on the mobile front possible in the short run, regardless of what happens on the desktop. And 7.6 is shaping up to give Firefox a run for its money.

Sushubh # Monday, November 15, 2004 3:24:00 PM

Heh, Seems like Haavard noticed the fear I showed on IRC Channel... Thanks Haavard for telling me that Opera is as healthy as I am.

TreeGo # Monday, November 15, 2004 3:24:00 PM

Thanks for lifting my spirits today, haavard. I would hate to think of not being able to use Opera anymore.

Patrick Liberthilolib # Monday, November 15, 2004 3:24:00 PM

Thanks, Haavard for setting the record straight.

Opera is too good not to succeed and I will do my bit to assure that it becomes the best browser.

Orosz Pálpalee # Monday, November 15, 2004 3:24:00 PM

I'm also a fan of Opera.
But as far as I understand, the Q3 numbers are from the bookkeeping, or financial statement.

If there is a temporary loss to gain further revenue in the future, it should pop up in the books too.

I thought it was a bad bookkeeping, because you can demonstrate further revenues assigned to Q3 as well.

I won't go into details, because my business english is not that good. So I'll just say it is just a bad job of bookkeeping.

Charlescalande # Monday, November 15, 2004 3:24:00 PM

In the past, Slashdot has already aired headlines that proved to be inaccurate, such as the CheerOS project, that was a quack.

Anyway, it is aimed as hardcore open-source geeks, and I suppose Firefox is good enough for them

What makes me angry is that newcomers read the "information" as is, and articles like these that create FUD (Fear, Uncertainty & Doubt) might be able to prevent them to just give a try of Opera

But that was a good reply Haavard

Rijk # Monday, November 15, 2004 3:24:00 PM

Palee: In a company like Opera, of lot of the 'Payroll and related expenses' could be classified as 'investment', to be depreciated over a few years instead of taken into account immediately. But it depends a lot on local accounting standards on what you can do, and I know zilch about the Norwegian accounting standards. Anyway, even if it was allowed, it would not be a good idea IMHO. So Opera has ran up losses for a few years, and this quarter again, while 'investing' in a beautiful but untangible asset that can't be put on the balance sheet: the Opera source code.

Orosz Pálpalee # Monday, November 15, 2004 3:24:00 PM

You are right, Rijk. You shouldn't play around with the book.

But if Opera signed fat contract where it can further revenue from, they should show up in the book in Q3.

I.e: if the contract says the buyer would be to pay 3 years from now, and you do hire people to deliver the goods, then you should assign part of this further revenue in this year as well.

Am I mistaken here?

GalleyGalley_SimRacer # Monday, November 15, 2004 3:24:00 PM

This is similar to a manufacturing company having to spend millions on new equipment for a new line of products. It's a one-time expenditure, that will bring more profits in the future.