Onavo buy to boost Facebook's plan to widen Internet access

Reuters

* Facebook is paying between $150 and $200 million - report

* Onavo's mobile app helps people cut mobile data costs

Oct 14 (Reuters) - Facebook Inc bought Israeli mobileapp-maker Onavo to use its data-saving capabilities for aproject aimed at making the Internet available to billions ofpeople round the world who are not online.

Onavo's mobile app helps people cut mobile phone coststhrough more efficient use of data and claims to get up to fivetimes more out of a data plan.

Onavo's data-saving feature is likely to help Facebook inits plans to provide internet access to underserved communitiesby working out ways to reduce the amount of data downloadsrequired to run mobile internet applications.

"We expect Onavo's data compression technology to play acentral role in our mission to connect more people to theinternet, and their analytic tools will help us provide better,more efficient mobile products," a Facebook spokeswoman toldReuters.

Facebook CEO Mark Zuckerberg has enlisted several technologycompanies to help him in a project aimed at making Internetaccess affordable to all.

Facebook is paying between $150 million and $200 million,the Calcalist financial news website said, making it one of thelargest deals by the social network after its $1 billionacquisition of photo-sharing app developer Instagram last year.

"Facebook made a build versus buy decision, likelyconcluding it would be smarter to buy Onavo then to try todevelop a similar suite of products itself," Wedbush Securitiesanalyst Michael Pachter said.

Three-year-old Onavo, which could not be immediately reachedfor comment, said in a blog that once the transaction closes itsmobile utility application will run as a standalone brand.

The Israeli company makes free apps for Apple Inc's iOS and Google Inc's Android platforms.

Apps, short for applications, are small pieces of softwarethat do useful or fun things on cellphones. The huge number andvariety of apps in Apple and Google stores are a key factor thathas helped the companies emerge as dominant players in thelucrative smartphone market.

Onavo has raised $13 million in venture capital, accordingto Calcalist. Its investors are Sequoia Capital, Magma VenturePartners, Horizons Ventures and Motorola Mobility Ventures.

Onavo will keep its Israeli offices, making this the firsttime Facebook will run a research and development center inIsrael, according to the Haaretz news website.

When Facebook acquired Israeli companies Snaptu in 2011 andFace.com in 2012, it transferred the employees to its ownoffices in California, where Onavo already has offices.

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