By Reed Albergotti and Ian Sherr
Facebook Inc. made its second blockbuster acquisition of the year, agreeing Tuesday to acquire Oculus VR Inc., a 20-month-old maker of virtual-reality goggles, for $2 billion in cash and stock.
Two people playing a demonstration game for the new Oculus development kit, shipping in July, 2014. Ian Sherr for The Wall Street Journal
Like Facebook’s $19 billion purchase last month of text-messaging service WhatsApp, the deal is part of the social-networking company’s vast ambition to connect people across all kinds of devices and modes of communication.
The deal also highlights the intense competition among big technology companies for promising startups, even when those startups, like Oculus and WhatsApp, have little revenue.
Oculus’s headset, called Rift, today is a visual device for playing videogames. But Facebook Chief Executive Officer Mark Zuckerberg said on Tuesday that the social network has bigger plans for it
“We’re going to make Oculus a platform for many other experiences,” Mr. Zuckerberg said in a statement.
“Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face—just by putting on goggles in your home,” he said.
It isn’t clear that consumers agree. So far, they’ve largely shunned fancy headgear that offers improved visuals, for videogames and for technologies like 3-D television. Virtual-reality technology has long been criticized for triggering motion sickness in users, a challenge that Oculus has said it is working to solve.
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(Published March 25, 2014 on the front page of The Wall Street Journal.)