The advertising technology space has been obliterated since the start of 2014.
After starting out with such promise, based on lots of hype and new IPOs from the likes of Criteo (CRTO), Rocket Fuel (FUEL) and Rubicon (RUBI), most of the ad tech names have been taken to the woodshed.
Look at Millennial Media (MM) since its IPO a couple of years ago. After briefly trading up to $25 in mid-2012, the shares are now below $2.
However, there's one company in the ad tech space that has flown under the radar for most U.S. investors because it predominantly trades in Norway where it is based. It's called Opera Software. The company trades in the U.S. on the OTC market under the ticker OPESY, but it is not very liquid. The shares in Norway trade a little more frequently.
The company currently has a $1.8 billion market capitalization. The stock is up fractionally for 2014 after almost tripling in value in 2013.
When I mention the name Opera and you're a tech investor, you probably think of a quirky browser company. It started in 1995 as a desktop browser, which hoped to rival Microsoft Internet Explorer. Along the way, the desktop browser market dropped in popularity as more and more users migrated to mobile.
Opera then adapted its browser for mobile and became very efficient at compressing data. Because of this efficiency, Opera's browser suddenly became very interesting for carriers -- especially in emerging economies where data plans are more expensive.
Today, Opera has 270 million people using its mobile browser. And it has been adopted by a bunch of mobile carriers and handset makers because of the higher efficiency. It's been especially popular with Android handset makers such as Xiaomi and Huawei, while earlier this week Nokia adopted its mobile app store.
In recent years, though, Opera has used this strength in mobile browsing to expand into ad technology through a series of acquisitions. The ad tech business now makes up about 37% of Opera's overall revenue. However, this is the fastest-growing part of the company's business. Even with conservative assumptions, the ad tech business might become 80% of Opera's overall revenues in a couple of years.
Opera has done a great job with publishers as well as advertisers. The company claims that its ads can now reach 800 million people, so, combined with its mobile browser, it can touch 1 billion people around the world.
It's highly unusual to mix an ad tech business with a mobile browser business. Opera recently restructured so that the ad tech business was in its own separate subsidiary, which makes it easier if someone wants to to buy it.
Although the stock ran up a lot in 2013, I believe the company's growth plans are still impressive and suggest that it's likely to have a good 2015.
Opera is not well followed here, but you should keep your eye on it.