Last night, Facebook (FB) announced that it has acquired Oculus VR for $2 billion in stock and cash, which some pundits view as a lot of money for a company at such an early stage of its product development. Facebook paid the majority in stock though, a powerful currency given its high valuation, which is smart.
With Instagram, Zuckerberg proved that Facebook has the ability to acquire a company without ruining its product. This might seem elementary, but it is no small point, given that corporate America is paved with deals gone bad.
In that regard, preserving the awesomeness of Instagram ultimately allows Facebook to make advertising deals with increased diversity and scale while also securing leadership in social image sharing which is fundamental for the company.
Many early Oculus proponents, some of whom financially supported the company on KickStarter early on, feel slighted that the company sold for so much and so quickly to the social behemoth.
However, these folks likely do not understand that without vastly increased resources, Oculus would get run over by others with deeper pockets such as Sony who is working on similar solutions. In addition, you have to figure that in a warehouse somewhere, Google has smart guys at this moment working through virtual reality as well. So it's a race, a war.
The Natural Progression of the Social Internet
Once again, Facebook CEO Mark Zuckerberg shows that he is willing to be aggressive in terms of "operationalizing" strategic vision. He appears to be thinking about online social interaction from a longer term perspective and what virtual interactions might look like five years from now rather than today or tomorrow.
Zuckerberg is likely already modelling a future in which the social internet includes a vivid 3D experience where friends sporting Oculus eyewear meet in a virtual environment and interact almost as if they were in the same room together.
In an interview last year, Recode’s Eric Johnson recounts a conversation he had with Oculus VR CEO, Brendan Iribe:
(Iribe) described in that interview a hypothetical social/messaging application for the Rift that would let people be “finally free of this 2-D monitor.” The application, he said, would let people communicate in a 3-D, 360-degree virtual environment, as though they were standing in the same room. “Kids will one day look back and laugh at FaceTime,” Iribe said
That would be pretty cool.
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- Mark Zuckerberg
- Oculus VR