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Facebook buying virtual-reality company for $2B

Mar 26 2014, 2:56am CDT | by

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Facebook buying virtual-reality company for $2B

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Facebook buying virtual-reality company for $2B

NEW YORK (AP) — Facebook is buying virtual reality company Oculus, betting $2 billion that its technology will become a new way for people to communicate, learn or be entertained.

"This is a long-term bet on the future of computing," said Facebook Chief Executive Mark Zuckerberg Tuesday on a call with analysts. "I believe Oculus can be one of the platforms of the future."

Irvine, Calif.-based Oculus VR Inc. makes the Oculus Rift, a virtual reality headset that's received a lot of attention from video game developers, though it has yet to be released for consumers. The headsets cover a user's eyes and create an immersive world that reacts to turning one's head or moving back and forth.

Beyond games, Zuckerberg said virtual reality headsets might someday be used to enjoy a courtside seat at a basketball game, study in a classroom, consult with a doctor face-to-face or shop in a virtual store. The technology also has social applications, he said.

"Imagine sharing not just moments with friends online but entire experiences and adventures," he said.

It is Facebook's second big acquisition in as many months. Last month the social network announced that it would pay $19 billion for deal messaging startup WhatsApp, a deal that hasn't closed.

"I don't think you should expect us to make multiple multibillion-dollar acquisitions within a couple months frequently," Zuckerberg said.

But he called Oculus a "unique" company with a major lead on rivals in technology, engineering talent and developer interest. Sony Corp. unveiled its own prototype virtual reality headset at a game-developers conference in San Francisco last week.

Zuckerberg said virtual reality technology is a computing platform unto itself, comparing it to personal computers, which revolutionized the world in the 1970s and 1980s, and mobile phones.

Facebook Inc. said Tuesday that the deal includes $400 million in cash and 23.1 million shares worth about $1.6 billion. Oculus employees are also eligible for an additional $300 million if the company achieves certain targets.

Facebook Chief Financial Officer David Ebersman said Oculus was valued based on the expected returns from the video game industry alone, with a higher return expected if it can expand into communications, entertainment or other fields.

Zuckerberg said Facebook intends to let Oculus continue with its roadmap of development but help out with recruiting, marketing, infrastructure and opening doors to new partnerships. He said he intends not to make a profit on hardware but instead make the product affordable and ubiquitous so Facebook can look at generating revenue from services, software, advertising, virtual goods or other areas.

Facebook says Oculus has received more than 75,000 pre-orders for second-generation development kits for the headset at $350 apiece. The kits are to ship in July.

Sales of Oculus' development kits alone are 10 times bigger than all other headsets in the history of virtual reality, said Antonio Rodriguez, general partner of venture capital fund Matrix Partners, an early investor that put $18.5 million in Oculus starting last year.

He said he decided to invest within minutes of trying on a pair of the goggles. Games he's seen being developed for the system include one where the player jumps off the side of a building and tries to avoid hitting things on the way down, and another where the player picks up and moves around blocks in constructing their own world.

Rodriguez said virtual reality could be used to enhance virtual tours of homes for potential buyers and for getting a flavor for distant locations before planning a vacation, say to Cancun.

"Short of the sunburn and the smell of the sweet Caribbean Sea, you're getting the whole experience," he said. "They're going to change the world."

Shares of Menlo Park, Calif.-based Facebook fell 53 cents to $64.36 in after-hours trading after closing up 79 cents at $64.89.


Nakashima reported from Los Angeles.

Source: AP


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Update: 11

Social Media Today: Oculus Deal Done, Facebook Adds Save Button, Uber Wi-Fi

Source: CBS Philly

By Melony Roy Facebook has officially acquired Oculus. MENLO PARK, CA – FEBRUARY 01: A sign with the ‘like’ symbol stands in front of the Facebook headquarters on February 1, 2012 in Menlo Park, California. (Credit: Justin Sullivan/Getty Images) The $2 billion deal announced in March has been approved by regulators. The FCC’s anti-trust team green-lighted the deal in April and it has now passed the California Department Of Corporations fairness hearing. The Virtual Reality start- ...
Source: CBS Philly   Full article at: CBS Philly 18 hours ago, 11:13am CDT


Update: 10

Facebook completes $2bn Oculus acquisition

Source: Develop Magazine

Facebook has officially completed its $2bn acquisition of Oculus.The shock deal was first announced in late March. It includes $400m in cash and 23.1 million shares of Facebook common stock, valued at $1.6bn. A further $300m will also be offered depending on the achievement of certain milestones.A joint statement from the two companies read: “We’re looking forward to an exciting future together, building the next computing platform and reimagining t ...
Source: Develop Magazine   Full article at: Develop Magazine 1 day ago, 4:06am CDT

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Update: 9

Facebook's $2 Billion Acquisition Of Oculus Closes, Now Official (Josh Constine/TechCrunch)

Source: Techmeme

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Josh Constine / TechCrunch: Facebook's $2 Billion Acquisition Of Oculus Closes, Now Official  —  Facebook now officially owns Oculus.  The $2 billion deal announced in March has been approved by regulators.  The virtualy reality startup still plans to operate somewhat independently and maintain its main ...
Source: Techmeme  Full article at: Techmeme 1 day ago, 3:15pm CDT

Update: 7

Former Valve Contractor says VR is “bad news”

Source: IGN

After his tweet claiming that VR was “bad news” started to make the rounds last weekend, Fabian Giesen, a former contractor for Valve, took to GitHub to offer further explanation and add some context. In his post, Giesen said it’s not anything about Oculus or current virtual reality (VR) technology itself, but rather the mentality behind VR that “seems to be fundamentally anti-social, completing the sad trajectory of entertainment moving further and further away from shared social ...
Source: IGN   Full article at: IGN Jul 14 2014, 3:32pm CDT

Update: 6

How Carbon Will Help Make Oculus's Virtual Reality Dream Real

Source: Fact or Design

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Carbon's Creative Director Peter Bristol and Oculus CEO Brendan Iribe talk about working to try and create the next wave in mainstream tech.Strap the black box to your face and you are taken to another world, hiding from the alien stalking you around a space station, or looking across a colorful island inhabited by a cartoon fox. The games you play on the Oculus Rift headset leave you focused on the singula ...
Source: Fact or Design   Full article at: Fact or Design Jul 14 2014, 6:30am CDT

Update: 5

Oculus sells over 100,000 Rift dev kits

Source: Develop Magazine

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Oculus has sold more than 100,000 dev kits for its VR headset the Rift.The milestone comes as the firm expects to begin shipping the DK2 headsets – the second iteration of its tech for developers.Pre-orders for the DK2 have reached over 45,000, and 10,000 are expected to be shipped in July. The first dev kits should reach developers during the week of July 14th.The first Rift dev kit sold around 60,000 units. Purchases of the new kit hav ...
Source: Develop Magazine   Full article at: Develop Magazine Jul 3 2014, 6:10am CDT

Update: 4

Facebook's Oculus Wants To Follow In Android's Footsteps By Licensing The Rift To Hardware Partners

Source: The Business Insider

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Oculus VR, the team behind the Rift virtual reality headset, is looking to follow Android's expansion model to bring virtual reality to the masses. Android, the mobile operating system with the largest market share, famously grew to prominence through its open nature — including the ability for hardware manufacturers to ship out a competitive smartphone without designing their own operating system. After Facebook's $2 billion acquisition of ...
Source: The Business Insider   Full article at: The Business Insider Jun 24 2014, 2:43pm CDT

Update: 3

Oculus VR to buy design team behind the Xbox 360 gamepad and Kinect, Carbon Design

Source: Engadget

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Just six months ago, we were talking about the money Oculus VR was raising from investors to get its virtual reality headset to consumers. Now, after being purchased by Facebook earlier this year, Oculus VR is making full-on acquisitions ...
Source: Engadget   Full article at: Engadget Jun 24 2014, 2:42pm CDT

Update: 2

Review: Oculus

Source: Latino Review

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An atypical horror movie that could have been great but instead settled for mediocrity and recycled tropes, "Oculus" is a frustrating near-miss. By focusing less on gore (though there's still enough on display to meet minimum requirements) and more on its characters and intriguing premise, it sets up gripping tale — and then it runs it around in circles before grinding to a disappointing halt.The movie begins with ...
Source: Latino Review  Full article at: Latino Review Jun 16 2014, 4:05pm CDT

Update: 1

Oculus expects to sell "north of a million units" for first consumer Rift (Kyle Orland/Ars Technica)

Source: Techmeme

Kyle Orland / Ars Technica: Oculus expects to sell “north of a million units” for first consumer Rift  —  Oculus CEO Brendan Iribe (left) says he's not expecting “a console-scale market” right out of the gate.  —  With a recent high-profile buyout to the tune of $2 billion, you might think Facebook and Oculus ar ...
Source: Techmeme  Full article at: Techmeme Jun 11 2014, 7:25pm CDT

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