Facebook's Oculus Buy Could Change The Face Of Social Media
Jim Probasco, Benzinga Staff Writer
Imagine experiencing a Final Four basketball game, enjoying every spellbinding second, almost as if you were actually there. Only you’re not. Instead, a Facebook (FB) streaming service provides the experience and pipes it into your Oculus virtual reality headset.
Following Facebook’s just announced acquisition of the company that makes the Oculus Rift, CEO Mark Zuckerberg told analysts he saw just such potential for what has up to now been promoted as a video-gaming device.
Zuckerberg said, “Oculus has the potential to be the most social platform ever. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”
Among the scenarios Zuckerberg suggested in a Facebook post in addition to the aforementioned courtside seat, were studying with a group of fellow students or consulting face-to-face with your family doctor.
To make those almost mind-blowing scenarios possible, Zuckerberg and Facebook planned to fork over $2 billion in cash and stock in a deal expected to close sometime in Q2 of this year.
Specifically, Facebook said it would pay $400 million in cash and $1.6 billion in Facebook stock. The deal included an additional $300 million if Oculus meets performance targets. The company, Facebook said, would continue to operate independently.
Interestingly, Facebook’s acquisition took place ahead of the company even releasing a consumer-based product. Following a highly successful Kickstarter campaign that raised $2.5 million, ultimately resulting in $90 million in venture funding, the company shipped around 75,000 developer kits, but no headsets to the public. Zuckerberg did not say when an actual product might be available for purchase by the public.
The focus, for now, will be on gaming. Others in the virtual reality gaming space include Sony, which launched its own virtual reality headset recently, and Microsoft, which has said it was interested in that technology.
In addition, Facebook’s ability to grow businesses was seen as a boon. GameSpot pointed to Instagram, which had just 30 million users when acquired by Facebook and now has more than 200 million, as one example.
Also cited, the fact that Facebook had the staying power to support VR development over the long run, an important element when it comes to emerging technology.
At the time of this writing, Jim Probasco had no position in any mentioned securities.