Sunday, March 30, 2014

Facebook Acquires Oculus VR, Ups the Ante

By Rabin Man Shakya

Millions of people across the world understand that in order to be social, interactive  and be competitive in their respective fields, they must have a social media presence. No doubt, social networking sites like Facebook, Twitter and Google play a Zeus-like role in the global social media's trajectory.

In fact, social media sites like Facebook, Twitter have become an indispensable part of the people's lives across the world. Today more than ever, majority of the people across the world can not imagine their lives without the Internet and social media. That is why 68 percent of the adult US population use the social media in a regular basis. But in case of a developing country like Nepal, although the number of social media users are increasing day by day, the use of social media has been largely confined to the country's English speaking minority.

And there is this reality for the social media sites like Facebook which does not want to lag behind in the intense competition among the social media institutions. By hook or by crook, social media giants like Facebook would like to stay relevant in the time to come. That is why, probably, Facebook Inc. has made one after another  expensive bets on the future, and this time, very recently, by agreeing to acquire Oculus VR Inc, a 20-month-old maker of virtual-reality goggles, for $ 2 billion in cash and stock.

According to 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 Wall Street Journal, March 26, 2014).

Well, prior to the deals with the Oculus VR Inc and WhatsApp, the Facebook had also acquired Instagram for $ 1 billion in 2012. And according to a news report, WhatsApp at least has more than 450 million users, but Oculus VR, a startup thatis less than two years old, has so far only sold its headsets to game developers.

So, the news that Facebook is paying colossal amount of 'dinero' to the Oculus VR has raised questions about the rationale behind it and has triggered the doubts of some analysts that Facebook Inc may just be upping the ante by acquiring it.

A broader question, however, is whether this kind of shopping spree of the Facebook Inc will enable it to stay relevant in the world of social media beyond the next decade?

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