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Facebook Acquires Data Compression Company to Further Mission


The social network takes the next step in bringing the Internet to the entirety of the world's population.

In August, Facebook (NASDAQ:FB) -- along with a slew of major tech companies, including Ericsson (NASDAQ:ERIC), Qualcomm (NASDAQ:QCOM), Samsung (OTCMKTS:SSNLF), and Opera (OTCMKTS:OPESY) -- announced, an initiative to bring the Internet to the entire world. As the organization's press release read, "Today, the Internet isn't accessible for two-thirds of the world. Imagine a world where it connects us all."

Now, Facebook has acquired Onavo, an Israeli company that specializes in data compression, which allows users to use less data on their Android (NASDAQ:GOOG) and iOS (NASDAQ:AAPL) smartphones or tablets. Mobile data actually costs a lot more in the developing world than it does in the US or Europe, so data compression could help mobile phone users in Africa or South America overcome prohibitive data costs.

According to the Israeli daily business newspaper Calcalist (which is a Hebrew wordplay on The Economist), Facebook will pay between $150 million and $200 million for Onavo. Previously, the data compression company had raised about $13 million in venture capital from Sequoia Capital, Magma Venture Partners, Horizons Ventures, and Motorola Mobility Ventures. Coming after its estimated $70 million purchase of mobile app developer Snaptu in 2011 and its $100 million purchase of face recognition platform in 2012, the acquisition is Facebook's third and largest in Israel. Moreover, it is the first time that an Israeli company acquired by Facebook will keep its office in Israeli, meaning that Facebook will have its first research and development center in the country.

Onavo already has users in the developed world who employ its platform to lower costs and minimize roaming fees, and these users need not fear, as the company will continue to offer its services under its own name.

A lot of debate, speculation, and outright skepticism followed Facebook's announcement of, but the Onavo acquisition seems at least to be a move in the right direction. Considering the fact that Google, the World Wide Web Foundation, and Facebook have also launch a new initiative on this front, the Alliance for Affordable Internet, it would appear that this movement is gaining traction.

Follow me on Twitter: @JoshWolonick and @Minyanville
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