On a conference call regarding the Facebook/Oculus deal, Facebook’s (NASDAQ:FB) CEO’s detailed some of the ways the VR company could help with Facebook Inc (NASDAQ:FB)’s evolution in the future, then Brendan Iribe’s comments from his end, and finally Facebook’s David Ebersman’s take on the matter.
Facebook CEO Mark Zuckerberg announces Oculus acquisition
I’m excited to announce that Facebook Inc (NASDAQ:FB) has reached an agreement to acquire Oculus VR, the leader in virtual reality technology. Our mission in Facebook is to give people the power to share, and 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’ve made a lot of progress on mobile. As of last week, there are now more than 1 billion people actively using our mobile apps alone. More than 20% of the time that people spend in apps on mobile phones is using Facebook services. And more than half of our ad revenue comes from mobile. We still have a lot of work to do on mobile, but at this point we feel strong enough in our position that strategically we also want to start focusing on building the next major computing platform that will come after mobile.
Mobile is the platform of today. And now we’re starting to also get ready for the platforms of tomorrow. To me, by far the most exciting future platform is around vision, or modifying what you see to create augmented and immersive experiences. Today’s acquisition is a long-term bet on the future of computing. I believe Oculus can be one of the platforms of this future. Oculus builds virtual reality technology with the Oculus Rift headset and the unique software platform and services around it. When you put on their goggles, you enter a completely immersive computer-generated environment, like a game, or a movie scene or a place far away.
Mark Zuckerberg on helping Oculus
Immersive gaming is the first big opportunity and Oculus already has big plans here they won’t be changing. The beta version of the Rift is highly anticipated by the gaming community, and Oculus has already received orders for more than 75,000 development kits, which is pretty crazy by itself. We’re going to focus on helping Oculus build out their product and develop partnerships to support more games and accelerate their plans. And they’ll continue operating independently within Facebook Inc (NASDAQ:FB) to do this. But gaming is just the start. After games, we’re going to make Oculus a platform for many other experiences.
Oculus has the potential to be the most social platform ever. Today, social networks are about sharing moments. And tomorrow, they’ll be about sharing experiences. We think people will love using this technology and we’re making a long-term bet that immersive, virtual and augmented reality will become a part of people’s daily lives. So that’s where we see the opportunities ahead for Oculus in future of computing. I’m really excited to have this opportunity to work with Brendan and his entire team. They’ve already achieved significant breakthroughs with just a small team. And we’re looking forward to helping them scale their efforts over the coming years.
Brendan Iribe on Oculus – Facebook partnership
We’re thrilled that Oculus VR is joining forces with Facebook Inc (NASDAQ:FB) and we’re really looking forward to working together to create the best virtual reality platform in the world. VR opens up entirely new opportunities. They jet a new generation of creative, compelling and engaging services that will fundamentally change the way we live, play, share, and communicate. We started with a focus on next-generation gaming. Now we’re teaming up with Facebook to invent the future. Facebook and Oculus share a common vision for the opportunities that virtual reality presents to the world. Facebook’s mission is to connect the world. And Oculus is focused on developing a new medium that allows people to connect in entirely new ways.
A few months ago, when Facebook Inc (NASDAQ:FB)’s CEO Mark and his team came down to visit our offices, it was immediately clear that the two teams share a passion for building a new world-changing communication platform. Moreover, our teams are culturally aligned with a focus on driving impact, moving fast, and hiring the best and brightest. As Facebook has grown, they continue to invest in efforts like the Open Compute Project, their initiative that aims to drive innovation and reduce the cost of computing infrastructure across the industry. This is a team that’s used to making bold bets on the future. All of this gives us the perfect foundation for collaboration. Facebook brings greater scale, with unique resources and capabilities that accelerate virtual reality’s future. By opening doors to new partnerships, helping develop the core functionality of our product, and supporting us with recruiting, marketing and infrastructure, the Oculus team can focus on doing what we do best, solving hard problems and delivering on the dream of virtual reality.
David Ebersman on Facebook’s acquisition transaction of oculus
Facebook Inc (NASDAQ:FB) will acquire Oculus for a total of approximately $2 billion, made up of $400 million in cash, and 23.1 million Facebook shares. The agreement also provides for an additional $30 million earn-out to be paid in a mix of cash and stock– $300 million, I’m sorry. $300 million earn-out to be paid in a mix of cash and stock if Oculus achieves certain milestones. The transaction is expected to close in the second quarter of 2014.
In the near term, Oculus isn’t expected to have a material impact on Facebook Inc (NASDAQ:FB) ‘s revenues. As Mark said, we’re very excited to announce this acquisition. In the next 10 years, we know that the platforms on which we operate will evolve.
We believe the combined strength of Facebook Inc (NASDAQ:FB) and Oculus will help drive the broader development and adoption of virtual reality technology, enabling over time a range of services including and beyond games, and making these services relevant and important for millions of people. Facebook will bring our capabilities, along with our close relationships with a broad range of developers, to help accelerate Oculus’s growth.