Facebook Inc. (NASDAQ: FB) already made major news and noise when it acquired WhatsApp for a zany sum of $19 billion. Now Mark Zuckerberg is making another large deal. Facebook is acquiring virtual reality leader Oculus for some $2 billion.
Facebook’s press release signaled that this acquisition positions the social media giant to accelerate Oculus’ growth in gaming, communications and new social experiences.
The $2 billion is coming as $400 million in cash, plus some 23.1 million shares of Facebook’s common stock. Facebook also said that the agreement provides for an additional $300 million earn-out in cash and stock if certain milestones are achieved.
Oculus is considered to be the leader in immersive virtual reality technology, via a headset. Facebook’s news release said,
“Oculus is the leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75,000 orders for development kits for the company’s virtual reality headset, the Oculus Rift. While the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas. Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform.”
Mark Zuckerberg even 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.”
Oculus will maintain its headquarters in Irvine, CA, and it is said that the company will continue development of the Oculus Rift. Facebook said that the transaction is expected to close in the second quarter of 2014.
Facebook shares closed up 1.2% at $64.89 against a 52-week range of $22.67 to $72.59, and shares were down less than 1% in the after-hours after the acquisition was announced. Keep in mind that Facebook’s market cap is still listed as $165 billion.
Here is what mark Zuckerberg expanded upon about Oculus on his own Facebook page: