Skyfire is launching version 4.0 of its popular Android mobile web browser today with a bunch of new features.

The release shows that the company is rapidly updating its mobile browsing experience. It’s reminiscent of the early competitive days of web browsing when Netscape squared off against Microsoft’s Internet Explorer browser on the PC, except that the battleground has moved to mobile this time. Skyfire has to square off against mobile browsing rivals such as Apple’s Safari.

The new version of Sky has eight new features and it allows users to customize their SkyBar, which includes buttons that link quickly to Twitter, Groupon, or Google Reader. There’s also a ‘Share’ button, Sports, News and Finance feeds, and a ‘Settings’ button. You can swipe the bar sideways to see all of the different features on a smartphone or tablet.

Mountain View, Calif.-based Skyfire introduced its first mobile browser in 2009 after raising $13 million in funding. Its goal was to run circles around simple web browsers such as Opera Mini by coming up with a full browser. The first Android version debuted in April, 2010.

The basic version will remain free for Android users. But the new version will have a premium in-app purchase capability to enable a premier video feature. That uses Skyfire’s cloud infrastructure (web-connected data centers) to optimize video streams for users. The video optimization will cost $2.99, after a three-day free trial. The feature pays for itself in a way by letting users watch more video while consuming 75 percent less data; that’s a savings for users who have capped or metered data plans, and it increases battery life.

The video optimization is also a free feature for a limited time for all Verizon customers who download Skyfire 4.0 for Android. All existing 3 million users of the app will be “grandfathered” for free access for the lifetime of their device. Skyfire has a user rating of 4.5 out of 5 possible stars, based on tens of thousands of reviews in the Android Market.

As part of a special, limited-time offer, Skyfire is giving away the video optimization feature to all Verizon customers downloading Skyfire 4.0 for Android. During the promotion, Skyfire will be available in the VCast Apps section of the Android Market for the Verizon uses.

“With Skyfire 4.0 for Android, we’re enabling users to customize their browser toolbar to fit their interests, from sports, to social networks, to finance, news, and local deals,” said Jeff Glueck, chief executive of Skyfire. “While the basic browser will remain free, with the launch of Google’s Android In-App purchase platform, the time has come to make our video cloud acceleration service a premium feature that reflects the investment we make to support each user in our cloud.”

With the Twitter integration, users can get one-touch access to Twitter streams. They can tweet, search and check in without leaving the Skyfire browser. They can also watch videos shared on Twitter with just one click.

With the Groupon button, you can likewise check on the deal of the day with one touch. You can easily share articles, web sites, pictures and videos with the Share button, which previously was only accessible via a menu.

The Google Reader lets you keep up with the feeds from your favorite sites with a one-button push. Check out the new features of Skyfire below in the video.

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