What is Facebook Doing?

On March 25th 2014, Facebook CEO Mark Zuckerburg posted to Facebook regarding it’s acquisition of Oculus VR and it’s Kickstarter backed virtual reality hardware Oculus Rift. The sum that Facebook paid out to Palmer Luckey was 2 billion dollars. Now let stop for a second; consider why would a social networking and media site like Facebook would go and buy a virtual reality company that’s core product and experience is focused for gaming. Now if the buyer was Google or Samsung or even Apple, this would not be big news. Sure, current community would still be upset over the buyout, as they are right across the Internet but the acquisition by Facebook is perplexing at best. The question really is what is Facebook really going to do with the Oculus Rift?

Before we delve further into Facebook’s latest acquisition, let us talk about Oculus Rift. If you are not into gaming or been under a rock for the past year, Oculus Rift is, as mentioned before, a virtual reality headset. It a piece of hardware not for you just to interact with the game, but to be in it, for you to walk about and immerse yourself inside the game world. Basically, imagine invading the beach in Battlefield 4 or floating through space in Call of Duty Ghosts and being able to turn your head and actually have your avatar move along with you. That is what the Oculus Rift delivers; being able to walk, jump and run inside the game world. While virtual reality is not something new, it is the closest we come to actually having something that is immersive enough not to, well, feel weird and nauseating, unlike Nintendo’s Virtual Boy, which out came in 1995.

Now with that out of the way, we can finally begin to look at what Facebook wants with Oculus VR and it core product. Now this is nothing new for companies to buy companies with products outside of its core service. I mean, Google is a perfect example of this, just a quick perusal of the Wikipedia page of the list of acquisition they have bought companies in a variety of categories, including Motorola, the hardware manufacturer, to Titan Aerospace, which is for their project Loon.

In fact, TechCrunch, using an infographic from Simply Business, has prepared a timeline of sorts with all the acquisitions that Apple, Google, Yahoo, Amazon and Facebook has gotten since 1999. From here, we can see all the major acquisitions that these companies have made. Looking over the Facebook timeline, we see companies like Instagram and Whatsapp, which were acquired for 1 billion and 19 billion dollars, respectively. Now let us take a quick look at say, Apple. Their portfolio contains companies named Topsy, which did analytics of social media sites, and Authentec, mobile security company.

A quick look of all this indicates a trend in Silicon Valley, which is to buy all the smaller companies to either expand user base and limit competition or buy the technologies they have created and use them for themselves.

As far as this trend goes, it has, for the most part, worked extremely well. In Apple’s case, the acquisition of Authentec allowed it to make Touch ID a key part of the iPhone 5S, along with Siri, which was another acquisition back in 2010. For Facebook, the acquisition of Instagram and Whatsapp has allowed to the company to gained further access to the data of their users and might have allowed Facebook to further expand their user base with new smartphone users. Google acquisition of Docverse spun off into, you guess it, Google Docs and later, Drive. With a few exception here and there, the most notable being Google, every acquisitions that these companies have made has made sense; they have benefited from the additional users signing up or from the technologies and analytics that have brought to the companies.

The question now really, what is Facebook trying to do? It is trying to reinvent itself by trying to get into gaming? It is trying to integrate Facebook into the Oculus Rift, which on the face of it, is just simply absurd. Maybe they are just buying Oculus VR for their patents and wage a patent war, kind of what Google was attempting with their acquisition of Motorola Mobility. Or maybe, they genuinely want to help Oculus VR with funding and let them not worry about working off only their profits. At this point, it is unclear what Facebook is going to do, but now Oculus’ fate is tied to it, along with the hope of having usable virtual reality being available to the consumer.

And perhaps this also signifies Facebook’s fate. As it often goes in the tech world, failure to innovate is failure to grow and stay alive. This could be the start of Facebook’s final swan song, before its descend into the likes of Myspace and Blackberry. Or perhaps this is Facebook’s rise from the ashes, growing out of the stagnant social network into something like a game publisher or something entirely new. Whatever its fate may be, if the ship sink or floats, Oculus and the hope for consumer virtual reality, is going with it.