So Facebook just bought Oculus for $2bn....

May I remind you that Facebook bought whatsapp a few weeks back for $19bn, and now they've bought Oculus for $2bn, and it hasn't even released a product commercially yet. What I really want to know is who the hell is advising these guys?

Edit: My initial reaction at hearing about this was to scoff in disbelief at Facebook placing another huge bet on the roulette table, but after discovering that in response to the threat from Oculus Sony are releasing a VR headset too, and the immense consumer interest in Oculus and other VR projects on crowdfunding sites, I am starting to think this was actually a sensible acquisition after all.

http://www.businessinsider.com/facebook-to-buy-oculus-rift-for-2-billio…

You only need to read the first two paragraphs, but I'm sure rest of the article will provide much amusement too.

 
CHItizen:

Didn't Zuckerberg just say they're going to digest the Whatsapp acquisition for a bit?

need to wash it down w/ more "synergies" aka future goodwill writedowns

speed boost blaze
 
<span class=keyword_link><a href=/resources/skills/finance/going-concern>Going Concern</a></span>:

Ok regardless of how these Oculus headsets are entirely unrelated to Facebook, I really need to get one. Are they commercially available yet? Anyone know what you can do with them exactly? If it really is virtual reality like some Total Recall shit, I would easily pay the $350 price tag.

apparently graphics suck, give it a few yearas

speed boost blaze
 

I was able to try out the oculus rift and the razer hydra in a some phd video game research, and it was extremely hard for me to control and I nearly threw up from nausea. The graphics weren't that good either. That's only me though. Some people may love it.

 
VoidTrading:

http://valleywag.gawker.com/oculus-grift-kickstart...

Cool article here about an investor in Oculus Rift who got screwed as they don't receive any returns from this gigantic sale.

Going to be pretty interesting to see how Kickstarter works now.

Thoughts?

"Investor," aka someone who backed the Kickstarter. Did you read the article?

All I see in this thread is a band of downtrodden monkeys.

Investment bankers still sell companies, right? Cognitive dissonance is an ugly thing.

 
VoidTrading:

http://valleywag.gawker.com/oculus-grift-kickstart...

Cool article here about an investor in Oculus Rift who got screwed as they don't receive any returns from this gigantic sale.

Going to be pretty interesting to see how Kickstarter works now.

Thoughts?

Kickstarter donors aren't equity investors in the business so they didn't get screwed, they got exactly what was listed on the Kickstarter page for their donation level: https://www.kickstarter.com/projects/1523379957/oculus-rift-step-into-t…

 
Bullet-Tooth Tony:
Zweihander:

What I really want to know is who the hell is advising these guys?

Nobody is advising them. Perhaps that is part of the problem.

http://www.bloomberg.com/news/2014-03-26/facebook-...

"No bankers were involved in the deal, according to a Facebook outside representative."

What "problem" would bankers solve here, exactly?

 
meph:
Bullet-Tooth Tony:
Zweihander:

What I really want to know is who the hell is advising these guys?

Nobody is advising them. Perhaps that is part of the problem.

http://www.bloomberg.com/news/2014-03-26/facebook-...

"No bankers were involved in the deal, according to a Facebook outside representative."

What "problem" would bankers solve here, exactly?

Overpaying?
 

Facebook realizes that Facebook itself will not be a gold mine forever, so they are positioning themselves to be like Google - have their bread and butter (Facebook) but also have other forward looking projects to stay progressive and prevent themselves from becoming stale.

Oculus is a great acquisition where Facebook can explore with it without pressure from investors to immediately monetize off of it.

In the past we've had Microsoft vs. Apple.

In the near future we will have Google vs. Facebook. They are growing into each others backyard.

 

It's all about looking forward. I honestly don't think it is a bad acquisition. Look at Google, they are exploring a ton of different paths and trajectories that aren't directly related to their core competencies, yet they want to make sure they stay fresh and are relevant in the future (e.g. Nest acquisition for a seat in the connected home market).

Facebook was slow to realize mobile was the platform to focus on (unlike Apple and Google who essentially shaped what it looks like today). For the past seven years it has been clear that mobile was next. We've passed that stage and mobile is now. They simply want to make sure they don't miss the next big platform/want to lead the next big platform and are taking a bet on VR. It's a risky game, but one worth playing in.

The error of confirmation: we confirm our knowledge and scorn our ignorance.
 

What'sApp was a bad acquisition. At first sight, this seems worse.

There's no competitive advantage at all. Even Nintendo may have more relevant patents than Oculus. What's to stop anybody from reverse engineering this, or launching a better, faster product?

SONY, AAPL, MSFT and Samsung have relationships with a lot of game and app developers. Once they get any nerd kid to build their prototype, content generators will work much faster with them. I'm pretty sure CoD and GTA are more entertaining than Farmville in virtual reality. How will Oculus/FB keep all the new entrants at bay?

Without cash flows, competitive advantages or optionality (it's not an optionality if anybody can steal your market whenever they please) this is pretty much a 2B investment in capitalized R&D. I don't think the competition will need 2B to build such a gizmo.

FB is the ultimate corporate governance disaster. They're going to buy whatever Zuck thinks it's cool until they run out of easy money. I like their main business, but their growth strategy is completely out of hand.

 
ME207:

I find it really funny that a bunch of junior bankers/college kids think they are smarter than the Zuck.

Fair criticism but being a good tech guy and developing a cool and popular website doesn't mean you're a good investor. This is why you should surround yourself with people who complement your skill set by bringing something to the table that you don't naturally do, like the classic example of pairing a numbers-guy analyst type with an outgoing sales guy. Problem is, Zuckerberg's financier-in-chief is Ms. Lean-In Sheryl Sandberg.

 

Thanks for the monkey shit.

And yeah, I agree with you in principal. Definitely should bring people on board who have skills where you don't.

My criticism was more about how with every acquisition Facebook makes, unqualified people make criticism. Some guy who is a junior in college should not think he knows more about Facebook's roadmap going into the next decade than Zuck himself.

RE: Sheryl Sandberg. I agree with criticism people make about her feminism stuff. Obviously she is riding that wave all the way to the bank. However, I have found a lot of haters come out of the woodwork and rip into her, saying she is a clueless woman, etc. - but I would take advice from her about business way before I take any advice from them. She is worth $1BN, most of those haters are probably bringing in $50k a year. So criticism about the "Lean In" bullshit, yes I agree with that, feminism is fucking retarded, but criticism about her business moves? Not buying that.

 
SONY, AAPL, MSFT and Samsung have relationships with a lot of game and app developers. Once they get any nerd kid to build their prototype, content generators will work much faster with them. I'm pretty sure CoD and GTA are more entertaining than Farmville in virtual reality. How will Oculus/FB keep all the new entrants at bay?

Valve was working pretty closely with Oculus before the acquisition. There's a YouTube video somewhere of developers playing Team Fortress 2 on the Oculus Rift.

 

Unlike the questionable $19 billion acquisition of WhatsApp, this deal to buy Oculus VR is actually quite interesting. Assuming Zuckerberg allows the existing team at Oculus VR to retain their autonomy, and as long as key personnel (especially John Carmack, who is one of the greatest creative geniuses in his field) all remain on board, I am cautiously optimistic that this deal could work out in the end.

 

I don't know if this is a great idea. I know that Mojang were planning to develop a Minecraft for Oculus and when then learnt that Facebook bought it they throw this idea away so....

French student :)
 

It makes every sense Virtual Reality is the next big thing, and it will only get better ! Facebook is growing as company and they´re proving me wrong.

‘The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price." W.B." we venture the motto, Margin of Safety.” Ben Graham
 

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