This morning, Onavo, an Israeli start-up, announced it was being acquired by Facebook. Onavo’s flagship product is a data compressor. When you browse a web page or use an app on your phone, Onavo routes the traffic through its servers, where it compresses and optimizes the data before sending it on to the phone. Call it “small data.” The result is you see exactly the same web page but less data comes out of your plan. This makes a big difference in markets where users are loath to exceed data limits for fear of punitive charges.
With China closed off and an all-but-saturated market in the Western world, Silicon Valley firms are looking to the developing world for growth. Facebook kicked this off in August with internet.org, a non-profit organization that aims to connect the 5 billion humans who remain offline. Google followed suit earlier this month with the Alliance for Affordable Internet, which wants to “unlock rapid gains in internet penetration rates.” Today’s acquisition shows how Facebook is going to go about it.
Facebook, like Google, Twitter and Wikipedia, already has deals with many operators that allow users to access a lighter version of its service without incurring data charges. A $99 Nokia phone launched this year and aimed at the developing world had free Facebook access as a prominent feature.
Onavo’s technology should make Facebook lighter for those who do pay for data. That means they will be willing to spend even more time on the site. All this for the low, low cost to Facebook of some $100 million, according to Ha’aretz, an Israeli newspaper. (Terms of the deal have not been made public.)
In India, the two most popular web browsers on mobile are UCWeb and Opera, both of which compress data in browsers. Onavo does it for data coming through apps as well. UCWeb notes that “over 60% of total page views on Android are from Facebook. This is followed by Google Search, which gets 7% of the total page views.” According to Opera, “67% of Opera Mini’s Android users in India [use] the browser to access Facebook from their mobile devices, the majority number of webpages viewed are also from Facebook.”
Onavo also makes analytics apps that allow users to see how much data each app is using. Buying Onavo would mean Facebook gets that sort of information too—which would be tremendously valuable to it as it tries to get users to stay on its site.
The vast majority of Facebook’s users, if not its revenue, come from outside North America and Europe, and new users will be almost exclusively from outside those areas. To reach those people Facebook will need to rethink not just how it gets Facebook to them, but also the underlying mechanics of the internet. As more big Silicon Valley firms look to the developing world, expect to see many more efforts to make data smaller and access easier. Onavo is only the first shot in a the new war for users.