Facebook Acquires Data Compression Startup Onavo (FB)

Israeli startup, Onavo, was acquired by Facebook FB, according to an Onavo blog post  Monday.

Onavo makes data compression software, which Facebook said it planned to use in promoting the goals of Internet.org. Internet.org is a pet project of Mark Zuckerberg who hopes to offer mobile Internet access (and Facebook) to the four billion people in the world who do not currently have it.

In a sharp departure from Facebook’s previous position, the company said Onavo headquarters would be permitted to remain in Tel Aviv along with most of Onavo’s 40 employees. Previous Facebook acquisitions moved to Menlo Park as a condition of the deal.

Not only does this acquisition provide Facebook with important technology, it also gives the company its first office in Israel. Some Facebook fans wish the company had been more open-minded when it first negotiated for popular mapping app, Waze. That deal fell through, in part because Facebook insisted the company would have to relocate from Israel to the U.S. Google GOOG ended up acquiring Waze for $1.1 billion in June.

Commenting on the acquisition of Onavo, a Facebook spokesman told The New York Times, ‘‘We expect Onavo’s data compression technology to play a central role in our mission to connect more people to the Internet, and their analytic tools will help us provide better, more efficient mobile products.’’

Guy Rosen, co-founder and chief executive of Onavo, said ‘‘We’re excited to join their team and hope to play a critical role in reaching one of Internet.org’s most significant goals — using data more efficiently, so that more people around the world can connect and share.’’

Related: More Proof That Facebook Wants To Look More Like Twitter

Although terms of the deal were not disclosed, Techcrunch cited reports of a price tag of anywhere from $100 to $200 million.

In addition to data compression apps, Onavo also produces apps designed to optimize battery life, and analytic apps and software for consumers and for businesses to help chart how well other apps are performing.

Facebook’s primary goal is the development of mobile data compression software that will make Facebook more usable (read “cheaper”) in developing markets. Currently the technology is designed for smartphones but it’s only a matter of time before Facebook uses Onevo algorithms to offer users of all types of mobile devices a deal they will find hard to resist, i.e., “Facebook will help save you money on your data bills.”

At the time of this writing, Jim Probasco had no position in any mentioned securities.