It’s easy to make fun of some recent tech acquisitions. Google (GOOG) is buying into robots and thermostats. Facebook (FB) likes drones and goofy virtual reality goggles. But there’s also a method to the madness, one that makes pretty good sense if you step back and take a longer view, as venture capitalist Fred Wilson did on his blog last week.
“Mobile is now the last thing,” Wilson wrote. “And all of these big tech companies are looking for the next thing to make sure they don’t miss it.” No one – including Facebook CEO Mark Zuckerberg and Google CEO Larry Page – know whether that next big thing will be virtual reality, machine learning, the Internet of things or something else, Wilson writes, “but the race is on to figure it out.”
The most recent moves in that race, a long-term marathon more than a sprint, would have to include Facebook buying virtual reality goggle maker Oculus VR for $2 billion, hiring five high-altitude drone experts from British company Ascenta and paying a rumored $60 million for the Texas drone firm Titan Aerospace.
Eventually, such drones could be used to spread Internet access around the world, Facebook says.
Meanwhile, Larry Page’s troops have scooped up 8 robot-related companies, including Boston Dynamics, maker of the scary looking mechanical cheetah, and paid $3.2 billion for Nest, the company formed by former Apple exec Tony Fadell to revolutionize thermostats and other, seemingly boring household devices. Google’s “Project Loon” aims to spread Internet connectivity via blimps.
But we should separate the related plays from the out and out crazy.
Bringing faster Internet to more places at a low cost directly helps Google and Facebook with their current ad-based business models. Amazon (AMZN) CEO Jeff Bezos is also looking at drones to improve delivery options.
Even virtual reality seems pretty closely related to what Facebook does now, helping people connect and stay in touch. People already refer to sites like Facebook and Twitter (TWTR) as the “virtual water cooler” when they’re the focus of chitchat about last night’s football scores or celebrity gossip.
Big shifts in computing often leave the master of the Old World behind. Wordperfect and Lotus weren’t ready for the graphical user interface despite dominating the command line era. Facebook’s move to understand virtual reality may be way ahead of its time, but computing interfaces have become increasingly realistic and immersive over time.
Then there are somewhat related plays. Google’s robots and self-driving cars will need some of the same kinds of data and machine-learning artificial intelligence software that underlie current products like Google Search, Maps and Google Now.
Not all of these crazy-sounding deals will pan out. But publicly traded companies with the vision to look beyond their next quarterly results seem more worthy of praise than ridicule.
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