Oculus and Facebook are a Match Made in Heaven

Bjm9jKmIEAAAmSN Facebook has acquired Oculus. They paid about 2 billion (with a B) dollars for the upstart Virtual Reality company, give or take a few million in stock options.

Our mission is to make the world more open and connected. For the past few years, this has mostly meant building mobile apps that help you share with the people you care about. We have a lot more to do on mobile, but at this point we feel we’re in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences. This is where Oculus comes in. They build virtual reality technology, like the Oculus Rift headset. When you put it on, you enter a completely immersive computer-generated environment, like a game or a movie scene or a place far away. The incredible thing about the technology is that you feel like you’re actually present in another place with other people. People who try it say it’s different from anything they’ve ever experienced in their lives.

Said Mark Zuckerberg in a statement today. He goes on to talk about how Oculus is still going to concentrate on immersive gaming first, but there will be other ventures for the VR company in the future which have a more social bent.

But this is just the start. After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home. This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.

Undoubtedly this has cause many people to throw up in their mouths, perhaps even to wail or gnash their teeth. I have to admit, I was shocked initially too. After giving it some thought, however, I’ve come to Zuckerberg on this issue. Oculus and Facebook are a match made in heaven. Oculus has, very publicly, always needed money. As of 3 months ago they had secured 75 million dollars in Venture Capital funding (mostly from Spark Capital, Matrix Partners, and Formation 8) which was going to allow them to continue tweaking and prototyping the headset. It was always known that the 75 million wouldn’t be enough to bring a consumer version of the Oculus Rift to market, however, and it was only a matter of time before they’d need more funding. Without any significant revenue source, this was always going to come from Angel Investors and Venture Capital. It’s no surprise then that they would accept 2 billion dollars from Facebook, especially when it’s clearly stated by Mark Zuckerberg that they will continue to work on immersive gaming. Oculus, the company, was valued at 250 million dollars during it’s latest round of VC funding. This valuation was based on the idea that the Oculus Rift was going to revolutionize gaming. Facebook and Zuckerberg surely realize that the companies healthiest source of innovation comes from the Gaming market. I don’t expect them to be changing their road maps anytime soon and, in fact, this will likely bring the Oculus Rift to store shelves sooner rather than later. Facebook, on the other hand, gains in this deal because they’ve positioned themselves as a direct competitor to Google and Apple with their mobile services. They know that there is no longer any money to be made from Facebook proper and are looking to become a services provider rather than a social portal. The Oculus technology gives them a stranglehold on the burgeoning Virtual Reality market, one that Google is already dabbling in with Google Glass. Needless to say, this is a very aggressive move targeted directly at it’s mobile competitors that will undoubtedly cause a lot of brow furrowing in the boardrooms of Google and Apple. I expect great things to come from this partnership. I’m thinking it’s more likely we’ll be seeing a partnership with the Kahn Academy than a new, immersive Farmville game.


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