Norwegian software firm Opera has acquired Silicon Valley based Skyfire Labs, a specialist in mobile video optimisation and cloud. The firm is known for its Rocket Optimizer software which allows mobile operators to use cloud computing to optimise video and multimedia on crowded cell towers, in 3G and 4G LTE networks.

The acquisition price includes $50m cash upfront and performance based earn-out payments over three years, including $26m in cash held that can bring the total deal size to $155m.

Skyfire claims to provide mobile networks a 60 per cent boost in capacity by reducing the size of video and other multimedia content as needed to fit the available bandwidth. The software is able to detect when specific users are facing poor quality of experience and intervene, minimising buffering and stalls.

The approach aligns somewhat with the trend toward SDN (software-defined networking), where network applications are moved into the cloud and run on commodity hardware and software.

Skyfire also has a mobile browser extension and toolbar platform that allows users to personalise their browser. The company currently counts three large US mobile operators as customers for its Rocket Optimizer and Skyfire Horizon offerings, and is in trials with ten other operators around the world.

“Skyfire adds capabilities to our portfolio around video, app optimisation, 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,” said Lars Boilesen, CEO, Opera Software.

Optimisation and compression technologies are widely deployed by operators to squeeze more efficiency out of mobile web browser traffic. In 2010, Opera opened a datacentre in Iceland to help it compress and manage all the web traffic for users of Opera Mini. Opera Mini compresses data by up to 90 per cent before sending it to the phone, resulting in more rapid page loading and more web per MB for the end user, the company said.