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Yes, but Instagram and Parse are services that fall within Facebook's major product area and have teams with related experience to Facebook's daily operations.

Yes, but Instagram and Parse are services that fall within Facebook's major product area and have teams with related experience to Facebook's daily operations. Oculus is not a service, just a technology; one that has no relation (nor clear route to one) to any Facebook-held product.

froo 13y ago
> Oculus is not a service, just a technology; one that has no relation (nor clear route to one) to any Facebook-held product. Exactly. This is what diversification is all about. At it's core, Facebook is now a public technology company, which means that creating value for its shareholders is it's primary focus. Buying something that looks like it might be a big deal before it becomes a big deal is doing that. Killing it before it has a chance to become big, especially since it has no "relation to any Facebook-held product" (thus it's not competing) is definitely not in their best interest.
- bduerst 13y ago
  >Diversification Conglomerates have some of the thinnest margins across many industries. Jumping into the electronic devices industry with a product that hasn't even hit market yet is a bad gamble, especially since a dedicated electronics manufacturer (Sony) is going to release the same product but with an already dedicated market (Playstation). It would have been better to wait until OR released, because then early adopters would have demonstrated if it is a viable product.
  - maldeh 13y ago
    Fair point. It definitely looks like an emotional purchase in a tough market. They're already getting creamed for it in the stock market [1] The way things look, this is largely a win for Oculus for finding a big backer, and a risky gamble for facebook. I think it's good that FB's putting some faith in a great team and product all the same -- [1] http://www.marketwatch.com/story/facebook-shares-drop-more-than-6-on-oculus-deal-2014-03-26 http://www.marketwatch.com/story/facebook-shares-drop-more-t...
- nightski 13y ago
  Publicly held companies often do things that lack vision and do not serve their best interest.
- bradgessler 13y ago
  I think most of us really wanted Oculus to be an insanely great technology, not Facebook's "diversification strategy".
  - AznHisoka 13y ago
    exactly. FB has experience with stuffing LOLCat pics in your FB feed. Not innovative tech.
    - karangoeluw 13y ago
      Define "Not innovative tech"
      - hueving 13y ago
        Did he not just say, "stuffing lolcats into your feed?"
        cheald 13y ago
        I'm not much a fan of Facebook, but it's only fair to give them credit where credit is due - things like Cassandra, HHVM/Hack, and React are all pretty important technologies, and their datacenter needs mean they've built an internal competency for hardware, too. I don't think this move makes obvious sense, but Facebook The Company (as opposed to Facebook The Product) is more than just an RSS feed of lolcats.
    - xerophtye 13y ago
      >FB has experience with stuffing LOLCat pics in your FB feed Seriously? Are you really saying that it's FB's evil plan to stuff cat pictures in your pictures? And not the fualt of those with whom you connect on FB? It's rather sad how so many people just think of FB as a "website" and not realize the truly innovative efforts they must go through to keep it running as such a massive scale. Not to mention, they built their own servers and pushed initiatives to help the whole industry set up proper infrastructures to achieve massive scale
- jcnnghm 13y ago
  Diversification at the corporate level isn't a good idea. Investors typically demand a discount (the conglomerate discount) for diversified corporations because they can easily diversify themselves by holding a variety of securities. Imagine an investor that values social networks highly, but who doesn't care for VR. They'll view this as a distraction from the core business, leading to a discount of the core business and an even greater discount of the VR portion. Diversification makes companies harder to analyze and reduces management focus, and has the tendency to depress both earnings and value. There are some exceptions around market inefficiency, for example in the case of emerging markets where companies are difficult to manage and finance, but those are becoming less common, not more. I think there may be an argument that the market inefficiency caused by the extra reporting requirements imposed by SOX is causing more companies to go public by way of acquisition instead of IPO, but I haven't really seen clear data on that point.
lem72 13y ago
Oh come on. I can think of a hundred applications Facebook could use the technology for and I am not a smart man. Just because Facebook does a few things well doesn't mean they can't... you know... grow and adapt with new technology. Facebook as a whole is probably a lot smarter than you and wouldn't spend 2 billion dollars on something without a "clear" route.
- hack_edu 13y ago
  Who couldn't think of a hundred applications you could apply Oculus to any product out there? That's why people get so excited about it! My point is that its unfair to compare the acquisitions listed above to Oculus simply because it of sticker-price or being so high profile. Oculus is a consumer device, a market that Facebook has tried numerous times and ran screaming from numerous times. Can they do it right? I'm sure they can. Is Oculus the right choice to start? Not my call. But is Oculus a web service? No. Does Oculus, company or product, relate at all to Facebook's product line? Not really. Did Instagram and Parse? Yes. Full stop.
debt 13y ago
I believe this acquisition was also a play to acquire more engineering talent. Through this acquisition they acquired John Carmack which is a fairly famous engineer amongst the tech community. That component alone strikes me as an incredibly awesome PR move in terms of recruitment. As far as I'm concerned Facebook is the only competitor to Google at this point. Facebook is just trying to keep pace. I assume they're going to do many awesome things in the near future that aren't necessarily aligned with their current business model in order to keep up that pace.
- cwyers 13y ago
  Carmack left iD because they wouldn't let him work on the sort of stuff he wanted to work on. I see no reason he'd stick around Faceulus as an acquihire; if he's working at Facebook in the future, it's because they're letting Oculus do what it was doing when Facebook bought it.
  - hack_edu 13y ago
    > if he's working at Facebook in the future ... beyond what's required by contract
  - wavefunction 13y ago
    @ hack_edu Contracts can be broken. I really doubt John Carmack has to do anything he doesn't want to do. It will be the canary in the coalmine as far as whether I purchase an Oculus HMD when they release. I do hate this "winner-take-all" situation where a few tech companies in the US acquire every single cutting edge company.
    - beedogs 13y ago
      An effective FTC and more widespread use of the Sherman act would be nice in the US.
      - stefan_kendall3 13y ago
        This would destroy most of the business models of most of the companies on this website. I fail to see how a social media company buying a headset manufacturer would even hint at anti-trust.
just_for_moment 13y ago
Look at the market. Don't you see it's counter-move to Google Glass?
- bp_ 13y ago
  No. Even if they both have monitors that move with your head, they are very, very different products. One's a head-attached smartwatch. Another's a presence creator.
krisgenre 13y ago
No relation? I can clearly see a Virtual Social Network :)

froo 13y ago

> Oculus is not a service, just a technology; one that has no relation (nor clear route to one) to any Facebook-held product. Exactly. This is what diversification is all about. At it's core, Facebook is now a public technology company, which means that creating value for its shareholders is it's primary focus. Buying something that looks like it might be a big deal before it becomes a big deal is doing that. Killing it before it has a chance to become big, especially since it has no "relation to any Facebook-held product" (thus it's not competing) is definitely not in their best interest.

bduerst 13y ago
>Diversification Conglomerates have some of the thinnest margins across many industries. Jumping into the electronic devices industry with a product that hasn't even hit market yet is a bad gamble, especially since a dedicated electronics manufacturer (Sony) is going to release the same product but with an already dedicated market (Playstation). It would have been better to wait until OR released, because then early adopters would have demonstrated if it is a viable product.
- maldeh 13y ago
  Fair point. It definitely looks like an emotional purchase in a tough market. They're already getting creamed for it in the stock market [1] The way things look, this is largely a win for Oculus for finding a big backer, and a risky gamble for facebook. I think it's good that FB's putting some faith in a great team and product all the same -- [1] http://www.marketwatch.com/story/facebook-shares-drop-more-than-6-on-oculus-deal-2014-03-26 http://www.marketwatch.com/story/facebook-shares-drop-more-t...
nightski 13y ago
Publicly held companies often do things that lack vision and do not serve their best interest.
bradgessler 13y ago
I think most of us really wanted Oculus to be an insanely great technology, not Facebook's "diversification strategy".
- AznHisoka 13y ago
  exactly. FB has experience with stuffing LOLCat pics in your FB feed. Not innovative tech.
  - karangoeluw 13y ago
    Define "Not innovative tech"
    - hueving 13y ago
      Did he not just say, "stuffing lolcats into your feed?"
      - cheald 13y ago
        I'm not much a fan of Facebook, but it's only fair to give them credit where credit is due - things like Cassandra, HHVM/Hack, and React are all pretty important technologies, and their datacenter needs mean they've built an internal competency for hardware, too. I don't think this move makes obvious sense, but Facebook The Company (as opposed to Facebook The Product) is more than just an RSS feed of lolcats.
  - xerophtye 13y ago
    >FB has experience with stuffing LOLCat pics in your FB feed Seriously? Are you really saying that it's FB's evil plan to stuff cat pictures in your pictures? And not the fualt of those with whom you connect on FB? It's rather sad how so many people just think of FB as a "website" and not realize the truly innovative efforts they must go through to keep it running as such a massive scale. Not to mention, they built their own servers and pushed initiatives to help the whole industry set up proper infrastructures to achieve massive scale
jcnnghm 13y ago
Diversification at the corporate level isn't a good idea. Investors typically demand a discount (the conglomerate discount) for diversified corporations because they can easily diversify themselves by holding a variety of securities. Imagine an investor that values social networks highly, but who doesn't care for VR. They'll view this as a distraction from the core business, leading to a discount of the core business and an even greater discount of the VR portion. Diversification makes companies harder to analyze and reduces management focus, and has the tendency to depress both earnings and value. There are some exceptions around market inefficiency, for example in the case of emerging markets where companies are difficult to manage and finance, but those are becoming less common, not more. I think there may be an argument that the market inefficiency caused by the extra reporting requirements imposed by SOX is causing more companies to go public by way of acquisition instead of IPO, but I haven't really seen clear data on that point.

lem72 13y ago

Oh come on. I can think of a hundred applications Facebook could use the technology for and I am not a smart man. Just because Facebook does a few things well doesn't mean they can't... you know... grow and adapt with new technology. Facebook as a whole is probably a lot smarter than you and wouldn't spend 2 billion dollars on something without a "clear" route.

hack_edu 13y ago
Who couldn't think of a hundred applications you could apply Oculus to any product out there? That's why people get so excited about it! My point is that its unfair to compare the acquisitions listed above to Oculus simply because it of sticker-price or being so high profile. Oculus is a consumer device, a market that Facebook has tried numerous times and ran screaming from numerous times. Can they do it right? I'm sure they can. Is Oculus the right choice to start? Not my call. But is Oculus a web service? No. Does Oculus, company or product, relate at all to Facebook's product line? Not really. Did Instagram and Parse? Yes. Full stop.

debt 13y ago

I believe this acquisition was also a play to acquire more engineering talent. Through this acquisition they acquired John Carmack which is a fairly famous engineer amongst the tech community. That component alone strikes me as an incredibly awesome PR move in terms of recruitment. As far as I'm concerned Facebook is the only competitor to Google at this point. Facebook is just trying to keep pace. I assume they're going to do many awesome things in the near future that aren't necessarily aligned with their current business model in order to keep up that pace.

cwyers 13y ago
Carmack left iD because they wouldn't let him work on the sort of stuff he wanted to work on. I see no reason he'd stick around Faceulus as an acquihire; if he's working at Facebook in the future, it's because they're letting Oculus do what it was doing when Facebook bought it.
- hack_edu 13y ago
  > if he's working at Facebook in the future ... beyond what's required by contract
- wavefunction 13y ago
  @ hack_edu Contracts can be broken. I really doubt John Carmack has to do anything he doesn't want to do. It will be the canary in the coalmine as far as whether I purchase an Oculus HMD when they release. I do hate this "winner-take-all" situation where a few tech companies in the US acquire every single cutting edge company.
  - beedogs 13y ago
    An effective FTC and more widespread use of the Sherman act would be nice in the US.
    - stefan_kendall3 13y ago
      This would destroy most of the business models of most of the companies on this website. I fail to see how a social media company buying a headset manufacturer would even hint at anti-trust.

just_for_moment 13y ago

Look at the market. Don't you see it's counter-move to Google Glass?

bp_ 13y ago
No. Even if they both have monitors that move with your head, they are very, very different products. One's a head-attached smartwatch. Another's a presence creator.

krisgenre 13y ago

No relation? I can clearly see a Virtual Social Network :)