Facebook steps into virtual reality by acquiring Oculus VR for $2 billion
Social networking giant Facebook will soon no more remain only in the social media industry and has finally set to step into the world of virtual reality by acquiring Oculus VR. The Menlo Park, California-based company is agreed to pay $2 billion to Oculus with a view to expand its verticals.
On announcing the new deal with Oculus through a press statement, Facebook founder and CEO, Mark Zuckerberg said;
“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”
Once the transaction closes, Facebook will pay $400 million in cash and 23.1 million shares of its common stock, which is valued at $1.6 billion based on the average closing price of the 20 trading days preceding March 21, 2014 of $69.35 per share. Additionally, the social network will also give $300 million earn-out in cash and stock based on the achievement of certain milestones.
Irvine-based Oculus raised $91 million, of which $2.4 million was raised with crowdfunding via Kickstarter, to develop Oculus Rift. Oculus Rift is a virtual reality headset which resulted the receipt of over 75,000 orders for its development kits. The consumer version of the Rift is likely to be available in late 2014 or early 2015 but in the meanwhile, Facebook taken a step to take the virtual reality technology into a new world.
Facebook is all-set “to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas.” This means, Facebook may use Oculus technology to build a next social and communications platform.
The transaction is expected to close in the second quarter of 2014. Oculus VR will remain have its headquarters in Irvine, California, and will continue development of the Oculus Rift.