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Facebook takes a $2 Billion look into the future
Facebook says it's preparing for the reality of tomorrow; make that the virtual reality of tomorrow, with the company’s recent acquisition of Oculus VR Inc.
The producer of virtual-reality gaming glasses was purchased by Facebook for USD two billion. The amount is to be paid out in the form of 23.1 million shares of Facebook common stock and USD four hundred million cash.
WhatsApp, a mobile messaging service, was acquired in February by Facebook for USD nineteen billion as the social networking giant looked to capitalize on the app’s extensive network and multi-generational appeal. The move aided Facebook's move into the mobile marketplace. Now it apears Facebook is trying to stay ahead of its competitors, by targeting what it thinks will be the next generation of communication hardware.
Mark Zuckerberg, Facebook’s CEO, says "mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow.” Although, Oculus’s mission was to develop the future of gaming technology, it is clear that Facebook’s plans for Oculus are not constrained to the gaming market. Zuckerberg sees Oculus’s virtual-reality glasses working in social settings, including classrooms and sporting events.
Oculus’s profitable future also represented a potential threat to Facebook, making the acquisition a strategic move. Zuckerberg stated that, "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate." For a company that relies on social interaction, ignoring this company’s services could have impacted Facebook’s future relevance. Facebook also eliminated another potential threat with the purchase of WhatsAPP and the firm's youthful user base.
Facebook plans to monetise Oculus’s services through advertising and the sales of virtual goods. The company is still many years away from implementing this strategy and therefore the acquisition remains to be fully justified and the cost is being questioned.
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