There is a clear public divide forming over Facebook. On one side, you have the optimistics, those that see Facebook as a tool for good and integral to the future development of the internet and advertising. On the other side, there is a stigma associated with Facebook; a company that regularly violates the privacy of its users and profiteers through addicting games and aggressive advertising.
I bought into Facebook a couple of years ago, literally, I bought a bunch of shares. I’ve always seen Facebook as a ‘pioneer’ of privacy and privacy education – I fundamentally disagree with the (exaggerated) notion that Zuck is looking to call people out on their obscure porn interests. What Mark is doing is attempting to interpret trillions of pieces of data in a way that makes everything online more accessible. Sure, he’ll make a ton of money on the way, and he’ll run into lawsuits as modern-day pioneers always do, but Facebook is a force for good and they are still in the very early stages of growth… queue Facebook’s purchase of Oculus VR.
Yesterday, Facebook announced that they’re purchasing Oculus VR for a cool $2billion – spare change apparently, and their second huge purchase of a non-profiting company this year. Oculus is one of the leading virtual reality companies that is attempting to bring VR headsets to homes in the next few years (UPDATE: latest VR releases). Crowd funded for $2.5million, the ‘Oculus Rift’ (their first product) has made some serious progress into development and judging by these reactions, it’s a pretty immersive experience.
The moment the news hit, top comments on tech blogs across the world were quick to hammer Facebook. There’s huge concern (and even more speculation) that Facebook will be pushing social advertising into the realms of ultra-realistic 3D. With Oculus Rift being primed for the gaming community, there’s also outrage that the hardware is inevitably going to be used to play FarmVille…
But let’s look at two of the largest acquisitions Facebook have made in recent years, WhatsApp and Instagram. The consensus has generally been that these platforms have been improved or at least stayed the same since being acquired. Zuckerberg is not interested in moulding companies to fit Facebook, he’s investing in companies that are destined for what he believes to be success – and he ensures that the companies acquired are allowed to operate independently while Facebook simply owns and funds the venture.
Facebook’s business model is being misinterpreted. Their acquisition strategy is not to grow Facebook the social network, but to grow the Facebook “group”.
You’ve probably heard of AOL, they were pretty big back in the day right? Dial-up jokes aside, you’d probably be surprised to hear that they’re still hugely profitable company, but their focus has shifted to growing ad revenue through acquiring huge websites. Engadget.com, The Huffington Post and TechCrunch – the one thing they have in common is that they are all owned and monetised by AOL, but you wouldn’t know it. And Facebook is effectively taking the same path on a much larger scale.
But Virtual Reality?
The latest acquisition has definitely surprised most people. Of course Oculus has a lot of existing value in its R&D and intellectual property, but Facebook has just spent another couple of billion on a non-commercialised company. There’s clearly speculation coming from the heads of Facebook, but when you look into what Oculus offers, I would be amazed if a few VR headsets were not a typical middle-class household purchase in 10 years time. Now consider that was the case, being able to deliver immersive content through virtual reality, whether its games, social experiences, movies and even sporting events – you’re looking at a huge business. Facebook the social network is not intending to slap its brand across the headset; the network would simply use those trillions of bits of data to more effectively distribute targeted content through yet another medium.