7 ms·

Facebook’s $2B Oculus deal happened over the last five days

54 points by bjenik 13y ago

barrkel 13y ago
I wonder if something (or somebody) forced this.
- Florin_Andrei 13y ago
  Greed?
  - RollAHardSix 13y ago
    You mean 2 Billion Dollars. That's a number beyond greed. That means you are taking care of you, your family, and your employees. Everyone can take the moral high road but if you were staring at a contract like that, could you really say you would turn it down? You also have no idea of the terms. For all we know Oculus will still act as an independent agency only with better access to talent, much more capital access, and a huge advertising method-facebook itself! Or they are devoured by facebook and never see the light of day. Either way, it's 2 billion dollars and all the financial freedom that comes with having that much money. (Yes I know most of it's in stocks, but unlike everyone else I don't think people realize, facebook isn't going away in the next few years, they are a microsoft-a lumbering giant branching out through tech acquisitions).
    - Florin_Andrei 13y ago
      > facebook isn't going away in the next few years, they are a microsoft That was kind of my point. To quote a message I've posted before: Facebook is the new Microsoft, basically. Low on creativity and innovation, high on cash, riding to success a huge wave of demand that would have carried anybody else who just happened to be there at the right time. So now you're the Oculus guys, and you're thinking "do I really want to be bought by this kind of entity?" The cash sure is nice, as you pointed out, but the nature of the puppet master is also important.
psbp 13y ago
"Zuckerberg explained that he felt that Oculus represented an entirely new post-PC and post-mobile platform." He's probably right. While Google and others are focusing on half-baked wearables as their key to the future, facebook just bought a huge chunk of the most likely successor.
- aviraldg 13y ago
  Wrong. Google knows that there's immense potential in VR. It's just too early for them to get into it yet. The pushback from privacy advocates would kill any potential project.
  - meowface 13y ago
    How do we know they're not already working on it as a covert project?
    - IBM 13y ago
      Because that's not their M.O. They like getting the PR value out of all of their projects even if it isn't commercially viable.
- Oculus 13y ago
  Ironically, gathered from reading the initial reactions of early adopters, I think they just destroyed the chances of Oculus succeeding.
  - joshmlewis 13y ago
    Is your name a coincidence?
    - Oculus 13y ago
      Yeah, I just like the name :)
- GuiA 13y ago
mtgx 13y ago
That makes Palmer look even more like a greedy bastard, and that all he cared about was money all along. When he heard the $2 billion amount he was probably like: "So you want us to kill all of our gaming plans now, or should we wait a year to lay it easy on the fans?"
- christoph 13y ago
  I don't think people should be too harsh on Palmer. He's still very young. To me it feels like Facebook bought this insanely cheap. It's $17bn cheaper than Whatsapp. I'm sure there was some smooth talking involved in the deal. I couldn't help but think of the billion dollars scene from The Social Network[1] when I heard about the deal. [1] - https://www.youtube.com/watch?v=4e0n7vTLz1U https://www.youtube.com/watch?v=4e0n7vTLz1U
  - sillysaurus3 13y ago
    Palmer could have made far more money by waiting. Maybe he was tired of Oculus.
    - lazyjones 13y ago
      Serious question - why would he need any more money? And how certain would that have been? I can't imagine anyone who hasn't been deep into "FU money" for a while actually choosing "perhaps far more than 2 billion later" over "2 billion now".
- MichaelGG 13y ago
  Where do people get off commenting about how someone should have turned down $2BN? Do you have an authoritative source that shows he had solid offers for hundreds of millions? Otherwise where do you decide that he's being a "greedy bastard"? Even this article says they got "freedom to operate independently" - who knows, maybe it's true.
ucha 13y ago
>> Venture capitalist Marc Andreessen, who sits on Facebook’s board of directors, recused himself from the negotiations. I would really like to understand how these sort of conflicts of interest are dealt with and if they are investigated by the SEC/other government body...
Gravityloss 13y ago
To a not-so-knowledgeable person like myself, this seems like a bubble. Is it so hard to wire up some displays, optics and gyros? 2 billion? What could you do in-house or with a new team with, say 20 million? Maybe it is so hard.
- wmf 13y ago
  Don't forget the developer ecosystem. Oh wait.
- booruguru 13y ago
  That's like saying the iPhone is just a touch screen with a battery and a CPU. VR has been nothing more than a pipe dream for decades. But the problem isn't just merely optics and gyros...it also needs to be lightweight and super-responsive in order to prevent headaches, motion sickness, and disorientation. And also I think there are some complicated things they have to do in order to simulate stereo vision. These challenges are hardly trivial and there's still a lot that needs to be learned in order to refine the technology. $2 billion is a lot of money, more than it would cost to develop from scratch. But, in the past, others have tried to perfect this technology and failed. Facebook (or Apple or Google or Microsoft) could spend $2 billion developing their own VR hardware and easily end up with nothing more than vaporware. Occulus Rift has the benefit of being a real product that works...while only being a few iterations away from a consumer-ready product.
- kevingadd 13y ago
  People have been trying to get VR right for decades, and Oculus's developer units were probably the first remotely accessible devices to let you experience something that approximates good VR. Reportedly the second-generation oculus devices are even better. The criteria for 'good' here are things like low latency, good position tracking, low display persistence, etc. Getting those things wrong causes headaches, nausea...
  - Pxtl 13y ago
    > People have been trying to get VR right for decades, Because display technology wasn't there yet. The thing that made Oculus possible wasn't some miraculous development at Oculus VR, but the fact that smartphones created a massive market of low-cost high-quality super-high-pixel-density tiny screens.
deletes 13y ago
I can't comprehend that John Carmack is now working for facebook.
- AaronFriel 13y ago
  If any programmer was worth a $2 billion acquihire - it's John Carmack.
- leoc 13y ago
  He sounds pretty happy about it: https://twitter.com/ID_AA_Carmack/status/448631990560903169 https://twitter.com/ID_AA_Carmack/status/448631990560903169 https://twitter.com/ID_AA_Carmack/status/448631430533246976 https://twitter.com/ID_AA_Carmack/status/448631430533246976
  - deletes 13y ago
    I suppose I will get a FB account now, so that may lead to some writing a little longer than tweet length If only there existed such a thing before facebook, a platform to enable others on the internet to read it,... a blog if you will. Oh wait... http://www.altdevblogaday.com/author/john-carmack/ http://www.altdevblogaday.com/author/john-carmack/ -------- I guess If someone gives you a lot of money you have to talk nice about them.
sarreph 13y ago
I wouldn't be surprised if a sense of awe of Zuck showing interest in the project helped shelve initial doubts about working with/for such a behemoth.
- sillysaurus3 13y ago
  I'm guessing the reason they sold was simple: The owner wanted the money.
- o0-0o 13y ago
  Wait, wait. So a nerd wants to buy his way into the coolest nerd party of all? Sounds like the plot to the next revenge of the nerds movie. Here's a fact: You can't buy cool.
o0-0o 13y ago
Virtual reality will never be reality.
- lelandbatey 13y ago
  I don't think that's true, especially since the internet's already facilitated most of "virtual reality". I can skype with people across the world, order anything I want and have it show up in days. I contest that "virtual reality" is basically already a reality. But sure, if you keep moving the goalposts then I guess VR won't be a reality :|
- qq66 13y ago
  "Reality" itself is virtual reality - with a carbon-based sensory system that outperforms what we've been able to do with silicon to date.
- ctdonath 13y ago
  Just like computers in every home. And certainly not multiple Cray 2 supercomputers with dozen-megabit/s multi-mile wireless networking accessing darn near the sum of human knowledge - in your pocket, costing a mere few days' pay. Sometimes the "will never happen" is just waiting for someone credible and insightful to pull together off-the-shelf technology, commoditize some magic stuck in a lab, lead a team to weave it all together, and present the world with something everyone wants but nobody is willing to buy into until everyone else does. A couple decades ago I had a Virtual iGlasses HMD. (Still have it. Anyone want it?) Sure it had its limitations, but the capability was phenomenal for the time ... alas, between the state of technology and nobody including support in suitable software, it went nowhere. Now we have the off-the-shelf technology to leverage (current dev kit is a mere $350), $2B to commoditize the magic needed, and Carmack to validate the implementation for universal buy-in and support. The only thing missing is normalization of strapping opaque goggles to your face for prolonged periods while thrashing around on the couch.
froo 13y ago
Sony announces Project Morpheus 6 days ago. Oculus sells to Facebook today and deal started 5 days ago (apparently). This is either a) Founders saw writing on the wall and decided to get paid early rather than have to compete with a company with much deeper pockets and a preexisting fanbase. b) Facebook saw that Sony's announcement validated the space and decided to buy the company with most mindshare at the moment as it is an asset. People have wondered why Microsoft didn't buy the company? Well, Oculus have seen what, $90M in funding so far? The investors would have wanted what.. 5X 10X ROI? At 5X.. $450M is a metric fuckton (excuse the language) of money that they could throw at in-house development of something similar. I imagine having a VR kit that integrates heavily with Kinect has the potential to be huge, so they at least have to be thinking about it.
- dsl 13y ago
  Even back before the Xbox One was announced people were digging up Microsoft patents on things like eliminating interference between "video headsets" and wireless controllers being used in close proximity. Thats a pretty late stage problem to be solving. Also remember that Microsoft and Facebook have a pretty strong working relationship. This could be Facebook taking Oculus off the market in exchange for a bigger cut of ad revenues on Facebook search.
- kailuowang 13y ago
  IMO it's not just the deeper pocket and preexisting fanbase, it's Sony's great relationship with the gaming industry (not to mention its high quality first party studios) that is almost impossible for Oculus to compete with. The founder then probably realized that gaming is no longer the main path Oculus should focus on. If the new strategy is to pursue a more broader application of VR then working with FB makes more sense than it looks. As a gamer, though, I can hardly see any other application of VR having more potential to become mainstream than VR in gaming.
  - qq66 13y ago
    Tourism could be a huge application of VR. I want to visit about 1000x as many places as I'll ever be able to -- VR could be a big part of making that possible.
newhouseb 13y ago
I'm sure this just means that the legal back and forth happened over five days, not that the deal started five days ago. This recode article has more detail which makes this much less of a sensationalist story: http://recode.net/2014/03/25/in-googles-shadow-facebooks-zuckerberg-pursued-oculus-over-several-months-ending-in-weekend-marathon-of-dealmaking/ http://recode.net/2014/03/25/in-googles-shadow-facebooks-zuc...
zakelfassi 13y ago
A $2B deal over five days ... sure. A 100K funding takes at least 2months. And, check this > http://www.reddit.com/r/oculus/comments/1wf6mg/so_no_way_to_confirm_this_but_my_friend_works_in/ http://www.reddit.com/r/oculus/comments/1wf6mg/so_no_way_to_...
- toufka 13y ago
  Pretty clearly in communication for at least a month.

54 points by bjenik 13y ago

barrkel 13y ago

I wonder if something (or somebody) forced this.

Florin_Andrei 13y ago
Greed?
- RollAHardSix 13y ago
  You mean 2 Billion Dollars. That's a number beyond greed. That means you are taking care of you, your family, and your employees. Everyone can take the moral high road but if you were staring at a contract like that, could you really say you would turn it down? You also have no idea of the terms. For all we know Oculus will still act as an independent agency only with better access to talent, much more capital access, and a huge advertising method-facebook itself! Or they are devoured by facebook and never see the light of day. Either way, it's 2 billion dollars and all the financial freedom that comes with having that much money. (Yes I know most of it's in stocks, but unlike everyone else I don't think people realize, facebook isn't going away in the next few years, they are a microsoft-a lumbering giant branching out through tech acquisitions).
  - Florin_Andrei 13y ago
    > facebook isn't going away in the next few years, they are a microsoft That was kind of my point. To quote a message I've posted before: Facebook is the new Microsoft, basically. Low on creativity and innovation, high on cash, riding to success a huge wave of demand that would have carried anybody else who just happened to be there at the right time. So now you're the Oculus guys, and you're thinking "do I really want to be bought by this kind of entity?" The cash sure is nice, as you pointed out, but the nature of the puppet master is also important.

psbp 13y ago

"Zuckerberg explained that he felt that Oculus represented an entirely new post-PC and post-mobile platform." He's probably right. While Google and others are focusing on half-baked wearables as their key to the future, facebook just bought a huge chunk of the most likely successor.

aviraldg 13y ago
Wrong. Google knows that there's immense potential in VR. It's just too early for them to get into it yet. The pushback from privacy advocates would kill any potential project.
- meowface 13y ago
  How do we know they're not already working on it as a covert project?
  - IBM 13y ago
    Because that's not their M.O. They like getting the PR value out of all of their projects even if it isn't commercially viable.
Oculus 13y ago
Ironically, gathered from reading the initial reactions of early adopters, I think they just destroyed the chances of Oculus succeeding.
- joshmlewis 13y ago
  Is your name a coincidence?
  - Oculus 13y ago
    Yeah, I just like the name :)
GuiA 13y ago

mtgx 13y ago

That makes Palmer look even more like a greedy bastard, and that all he cared about was money all along. When he heard the $2 billion amount he was probably like: "So you want us to kill all of our gaming plans now, or should we wait a year to lay it easy on the fans?"

christoph 13y ago
I don't think people should be too harsh on Palmer. He's still very young. To me it feels like Facebook bought this insanely cheap. It's $17bn cheaper than Whatsapp. I'm sure there was some smooth talking involved in the deal. I couldn't help but think of the billion dollars scene from The Social Network[1] when I heard about the deal. [1] - https://www.youtube.com/watch?v=4e0n7vTLz1U https://www.youtube.com/watch?v=4e0n7vTLz1U
- sillysaurus3 13y ago
  Palmer could have made far more money by waiting. Maybe he was tired of Oculus.
  - lazyjones 13y ago
    Serious question - why would he need any more money? And how certain would that have been? I can't imagine anyone who hasn't been deep into "FU money" for a while actually choosing "perhaps far more than 2 billion later" over "2 billion now".
MichaelGG 13y ago
Where do people get off commenting about how someone should have turned down $2BN? Do you have an authoritative source that shows he had solid offers for hundreds of millions? Otherwise where do you decide that he's being a "greedy bastard"? Even this article says they got "freedom to operate independently" - who knows, maybe it's true.

ucha 13y ago

>> Venture capitalist Marc Andreessen, who sits on Facebook’s board of directors, recused himself from the negotiations. I would really like to understand how these sort of conflicts of interest are dealt with and if they are investigated by the SEC/other government body...

Gravityloss 13y ago

To a not-so-knowledgeable person like myself, this seems like a bubble. Is it so hard to wire up some displays, optics and gyros? 2 billion? What could you do in-house or with a new team with, say 20 million? Maybe it is so hard.

wmf 13y ago
Don't forget the developer ecosystem. Oh wait.
booruguru 13y ago
That's like saying the iPhone is just a touch screen with a battery and a CPU. VR has been nothing more than a pipe dream for decades. But the problem isn't just merely optics and gyros...it also needs to be lightweight and super-responsive in order to prevent headaches, motion sickness, and disorientation. And also I think there are some complicated things they have to do in order to simulate stereo vision. These challenges are hardly trivial and there's still a lot that needs to be learned in order to refine the technology. $2 billion is a lot of money, more than it would cost to develop from scratch. But, in the past, others have tried to perfect this technology and failed. Facebook (or Apple or Google or Microsoft) could spend $2 billion developing their own VR hardware and easily end up with nothing more than vaporware. Occulus Rift has the benefit of being a real product that works...while only being a few iterations away from a consumer-ready product.
kevingadd 13y ago
People have been trying to get VR right for decades, and Oculus's developer units were probably the first remotely accessible devices to let you experience something that approximates good VR. Reportedly the second-generation oculus devices are even better. The criteria for 'good' here are things like low latency, good position tracking, low display persistence, etc. Getting those things wrong causes headaches, nausea...
- Pxtl 13y ago
  > People have been trying to get VR right for decades, Because display technology wasn't there yet. The thing that made Oculus possible wasn't some miraculous development at Oculus VR, but the fact that smartphones created a massive market of low-cost high-quality super-high-pixel-density tiny screens.

deletes 13y ago

I can't comprehend that John Carmack is now working for facebook.

AaronFriel 13y ago
If any programmer was worth a $2 billion acquihire - it's John Carmack.
leoc 13y ago
He sounds pretty happy about it: https://twitter.com/ID_AA_Carmack/status/448631990560903169 https://twitter.com/ID_AA_Carmack/status/448631990560903169 https://twitter.com/ID_AA_Carmack/status/448631430533246976 https://twitter.com/ID_AA_Carmack/status/448631430533246976
- deletes 13y ago
  I suppose I will get a FB account now, so that may lead to some writing a little longer than tweet length If only there existed such a thing before facebook, a platform to enable others on the internet to read it,... a blog if you will. Oh wait... http://www.altdevblogaday.com/author/john-carmack/ http://www.altdevblogaday.com/author/john-carmack/ -------- I guess If someone gives you a lot of money you have to talk nice about them.

sarreph 13y ago

I wouldn't be surprised if a sense of awe of Zuck showing interest in the project helped shelve initial doubts about working with/for such a behemoth.

sillysaurus3 13y ago
I'm guessing the reason they sold was simple: The owner wanted the money.
o0-0o 13y ago
Wait, wait. So a nerd wants to buy his way into the coolest nerd party of all? Sounds like the plot to the next revenge of the nerds movie. Here's a fact: You can't buy cool.

o0-0o 13y ago

Virtual reality will never be reality.

lelandbatey 13y ago
I don't think that's true, especially since the internet's already facilitated most of "virtual reality". I can skype with people across the world, order anything I want and have it show up in days. I contest that "virtual reality" is basically already a reality. But sure, if you keep moving the goalposts then I guess VR won't be a reality :|
qq66 13y ago
"Reality" itself is virtual reality - with a carbon-based sensory system that outperforms what we've been able to do with silicon to date.
ctdonath 13y ago
Just like computers in every home. And certainly not multiple Cray 2 supercomputers with dozen-megabit/s multi-mile wireless networking accessing darn near the sum of human knowledge - in your pocket, costing a mere few days' pay. Sometimes the "will never happen" is just waiting for someone credible and insightful to pull together off-the-shelf technology, commoditize some magic stuck in a lab, lead a team to weave it all together, and present the world with something everyone wants but nobody is willing to buy into until everyone else does. A couple decades ago I had a Virtual iGlasses HMD. (Still have it. Anyone want it?) Sure it had its limitations, but the capability was phenomenal for the time ... alas, between the state of technology and nobody including support in suitable software, it went nowhere. Now we have the off-the-shelf technology to leverage (current dev kit is a mere $350), $2B to commoditize the magic needed, and Carmack to validate the implementation for universal buy-in and support. The only thing missing is normalization of strapping opaque goggles to your face for prolonged periods while thrashing around on the couch.

froo 13y ago

Sony announces Project Morpheus 6 days ago. Oculus sells to Facebook today and deal started 5 days ago (apparently). This is either a) Founders saw writing on the wall and decided to get paid early rather than have to compete with a company with much deeper pockets and a preexisting fanbase. b) Facebook saw that Sony's announcement validated the space and decided to buy the company with most mindshare at the moment as it is an asset. People have wondered why Microsoft didn't buy the company? Well, Oculus have seen what, $90M in funding so far? The investors would have wanted what.. 5X 10X ROI? At 5X.. $450M is a metric fuckton (excuse the language) of money that they could throw at in-house development of something similar. I imagine having a VR kit that integrates heavily with Kinect has the potential to be huge, so they at least have to be thinking about it.

dsl 13y ago
Even back before the Xbox One was announced people were digging up Microsoft patents on things like eliminating interference between "video headsets" and wireless controllers being used in close proximity. Thats a pretty late stage problem to be solving. Also remember that Microsoft and Facebook have a pretty strong working relationship. This could be Facebook taking Oculus off the market in exchange for a bigger cut of ad revenues on Facebook search.
kailuowang 13y ago
IMO it's not just the deeper pocket and preexisting fanbase, it's Sony's great relationship with the gaming industry (not to mention its high quality first party studios) that is almost impossible for Oculus to compete with. The founder then probably realized that gaming is no longer the main path Oculus should focus on. If the new strategy is to pursue a more broader application of VR then working with FB makes more sense than it looks. As a gamer, though, I can hardly see any other application of VR having more potential to become mainstream than VR in gaming.
- qq66 13y ago
  Tourism could be a huge application of VR. I want to visit about 1000x as many places as I'll ever be able to -- VR could be a big part of making that possible.

newhouseb 13y ago

I'm sure this just means that the legal back and forth happened over five days, not that the deal started five days ago. This recode article has more detail which makes this much less of a sensationalist story: http://recode.net/2014/03/25/in-googles-shadow-facebooks-zuckerberg-pursued-oculus-over-several-months-ending-in-weekend-marathon-of-dealmaking/ http://recode.net/2014/03/25/in-googles-shadow-facebooks-zuc...

zakelfassi 13y ago

A $2B deal over five days ... sure. A 100K funding takes at least 2months. And, check this > http://www.reddit.com/r/oculus/comments/1wf6mg/so_no_way_to_confirm_this_but_my_friend_works_in/ http://www.reddit.com/r/oculus/comments/1wf6mg/so_no_way_to_...

toufka 13y ago
Pretty clearly in communication for at least a month.