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Facebook confirms Oculus purchase

Article By: ,  Financial Analyst
March 26, 2014 10:15 AM

Speculation over Facebook's plans for the virtual reality (VR) market is rife this morning (March 26th) after the social networking company confirmed the purchase of Oculus VR.

Oculus Rift, which is a goggle-like "immersive" headset for video gaming, was unveiled recently and has been tipped as one of the next big things in the technology world.

Facebook has moved quickly to snap up the company, with the deal believed to be worth as much as $2 billion (£1.2 billion).

Oculus had previously turned to crowdfunding to get its idea off the ground, with the nascent firm able to raise $2.4 million, which is ten times the amount it had been aiming for.

Future use

Facebook founder Mark Zuckerberg said in a statement that the use of Oculus technologies is to be expanded to include "communications, media and entertainment, education and other areas".

"Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow," said the company's chief executive. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."

Facebook added that 75,000 orders for Oculus VR development kits have already been placed, even though the company is still working on the final solution for the product.

Brendan Iribe, co-founder and chief executive of Oculus VR, stated that his firm is excited to be joining forces with Facebook. He said: "We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it's only just the beginning."

Oculus will remain at its Irvine, California headquarters after the deal, which includes $400 million in cash and over 23 million Facebook shares, which are currently valued at $1.6 billion.

Shares in Facebook initially fell away after the announcement was made, but they bounced back to be 1.23 per cent up in after-hours trading on the Nasdaq last night.

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