Facebook has bought Oculus Rift for US$2bn

25 Mar 2014

Facebook today announced it has reached a definitive agreement to buy VR headset creator Oculus Rift for US$2bn, leading to speculation about where the social network is heading next.

The company said in a statement that it has bought the company for a total of approximately US$2bn.

“This includes US$400m in cash and 23.1m shares of Facebook common stock (valued at US$1.6 billion based on the average closing price of the 20 trading days preceding March 21, 2014 of US$69.35 per share).

“The agreement also provides for an additional US$300m earn-out in cash and stock based on the achievement of certain milestones.”

The move comes just weeks after Facebook bought WhatsApp for about US$19bn.

Oculus burst onto the scene when it raised US$2.4m via crowdsourcing site Kickstarter.

It has so far raised US$91m in funding.

In December Marc Andreessen joined the company’s board when Andreessen Horowitz led a US$75m investment in the company.

The competitive forces applied by the arrival of Oculus have led to players like Microsoft and Sony embarking on their own forays into virtual reality headsets.

Facebook CEO Mark Zuckerberg said the acquisition is in keeping with Facebook’s stated mission to make the world more open and connected.

“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.

“Oculus’s mission is to enable you to experience the impossible. Their technology opens up the possibility of completely new kinds of experiences.

Immersive gaming will be the first, and Oculus already has big plans here that won’t be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there’s a lot of interest from developers in building for this platform. We’re going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this.”

Not just a games platform

Zuckerberg said gaming is just one facet of Oculus’ potential.

“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.

“These are just some of the potential uses. By working with developers and partners across the industry, together we can build many more. One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people.

“Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together. I can’t wait to start working with the whole team at Oculus to bring this future to the world, and to unlock new worlds for all of us,” Zuckerberg said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years