26 March 2014 | Team Tamar

Facebook buys virtual reality firm Oculus for $2 bn

Oculus RiftYesterday, Facebook announced the purchase of virtual reality technology firm Oculus for $2 bn. The deal will include $400m in cash, as well an additional $1.6bn in Facebook shares. On top of that, the employees could receive another $300m in performance bonuses.

Following the recent purchase of mobile service WhatsApp and that of Instagram in 2012, this is yet another major purchase for the social media giant. So what’s in it for Facebook this time?

Virtual reality headset

Oculus’ core product is the Oculus Rift, an immersive video gaming headset which is yet to be released, but attracted a lot of attention at the CES technology show in Las Vegas last January. In fact, there are already over 75,000 orders for the Oculus Rift, which is set for release in early 2015.

On top of that, Oculus managed to raise $75m last December to market its product, which goes a long way in summing up the enthusiasm and hype around virtual reality technology.With Sony also in the race with their own virtual goggles, there is little doubt this will become a competitive market in the coming years, if not the coming months.

The platform of tomorrow

Whilst the equipment is currently developed towards gaming, Facebook founder Mark Zuckerberg has far greater ambitions, and is confident the technology will become a dominant social media force in the future.

Explaining the deal in a Facebook blog post, Zuckerberg commented that whilst mobile was the emerging platform of today, Facebook were also ‘getting ready for the platforms of tomorrow’, adding ‘Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate’.

Taking social to the next level

Hence, according to Zuckerberg the Oculus technology could take things to the next level and be the ‘most social platform ever’. For instance, he suggests the headset technology could lead to major improvements in sectors like health and education, allowing people to consult their doctor or take lessons from the comfort of their home.

With estimated profits of $11.45bn at the end of 2013, Facebook can surely afford to take a gamble at least a little…

Team Tamar