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Oculus purchase: analysts weigh-in on Facebook’s $2 billion acquisition

Wednesday, 26th March 2014 19:23 GMT By Stephany Nunneley

Analysts have weighed in on the Oculus Rift $2 billion buyout by Facebook, which one industry watcher feels will appear as a bargain five years on.

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Speaking with GI International, Asif A. Khan, CFO of Virtue LLC. likened the deal to Google’s acquisition of YouTube in 2006.

“I think this Oculus VR/Facebook deal will appear cheap five years from now, he said. “This deal is very important for a number of reasons. Oculus VR now has the cash backing them to ensure their product will make its way to the market instead of worrying about more future venture capital rounds.

“Facebook has now entered the technology hardware arena and has done so by buying one of the most innovative companies in the world. While many people don’t understand how there could be any synergies between the two companies, I would just suggest the idea of an Oculus VR social network experience. Zuckerberg is no dummy and he saw that VR was a potential threat to Facebook’s dominant position as a communications platform. Facebook’s growth trajectory has changed entirely with this acquisition.”

Khan has previously offered that Nintendo should acquire Oculus VR, but Apple, Google, Microsoft, and Sony should have as well.

EEDAR’s Patrick Walker agreed, stating since the range of potential virtual experiences “is huge,” Facebook wanted to be prepared for such a future in order to integrate their social graph “into this technology platform early.”

“From a gamer’s perspective, this is exciting because another major company is putting their support behind VR technology,” he offered. “VR technology has been an emerging technology in games for a while, and on the cusp of GDC and a wave of new product announcements, including Sony’s new VR headset, appears ready to enter the mainstream. Facebook’s support of the technology will make this happen even sooner.”

IDC research manager Lewis Ward, however, said the acquisition didn’t “make a lot of sense” to him.

“When I think VR, I certainly don’t think Facebook,” he said. “I can see wanting to get in on the ground floor of a new tech that may eventually have mass appeal, but I think critical mass for VR is at least 5 years off, even in developed countries like the US.

I have to assume that Zuckerberg and company have a couple things on their long-term roadmap nobody outside the company has heard of and that they consider a great fit for VR headsets. It’s just not near being a mass market technology at this point so the acquisition is a bit of a head scratcher.”

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2 Comments

  1. Panthro

    It’s in the hands of Zuckerberg now, hopefully he doesn’t pick Oculus up and then just drop it on its head.

    It could go either way at this point, just because I don’t like using Facebook doesn’t mean it will turn out badly. You never know, he might be a massive gamer and will push it to lengths it would have never gotten to.
    Or he could butcher it’s potential and turn it into something it is not.

    What I do know is dropping 2 billion is a massive sum of money, he wouldn’t spend that if he didn’t think he could make something good out of it.

    Finger crossed everything turns out alright.

    #1 6 months ago
  2. TheWulf

    At least Facebook is privately owned, so it won’t be down to shareholders ruin it, so it may remain an open platform.

    What I don’t like about this is how obviously the Oculus Rift team were absolutely conned out of their company by a sheister who knows how to con people all too well. This is the problem when you have engineers running a company and a corporate shark tastes their potential in the waters. They were far too oblivious to what was happening, to the point where I really do feel sorry for them. Zucker just offered them the earth to get them to sign on the dotted line. And honestly, there’s a history of people who’ve been conned just like that. Engineers are really naive, and I’m talking from experience.

    That naivety is good for creating an indie scene where there are no gods and no masters, which is bloody fantastic, and what I was hoping for. But they also don’t deal well with sociopathic suits who couldn’t care less for human life, dreams, or aspirations. If the thing with Zucker had been more equitable, then I’d trust this more. But the way the founders talk about it (shown in the newest article), it gives off such a vibe that even they felt they were conned out of their company.

    It was just a whirlwind thing, and it all happened in three days. It probably sounded good to them until they had time to actually sit down and think about what happened. They probably had a little cry about it, too.

    And people wonder why I hate corporate culture and capitalism. Capitalism is society for sociopaths, honestly. Give me rigorously controlled capitalism in a socialist state, or even communism any day of the week. Sorry, but that’s just how I feel. People just continue to get screwed over by unchecked capitalism.

    #2 6 months ago

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