There’s been a lot of talk on Facebook’s acquisitions and how one or the other doesn’t make sense for the company, and the acquisition of Oculus Rift is the latest in this debate. I actually think that Oculus Rift is a much better buy for FB than Whatsapp for the following reasons:
- Whatsapp’s revenue model which is supposedly charging $1 after the first year (I have not personally seen this) is not realistic considering that switching costs are minimal and there are plenty of alternatives for users (Kakao, Line, Tango to name a few).
- If Facebook is looking to leverage engineering talent, Oculus leads in this regard (assuming that the number of employees has a higher ratio of engineers to other employees as is common in startups) and it has a passionate developer community.
- Gaming is not outside of Facebook’s purview but is actually a great move for a company whose users regularly play games within the platform. Remember Zynga and Candy Crush?
- Unlike Whatsapp whose main purpose is messaging, Oculus Rift is and could be more than just gaming. Mark Zuckerberg recognizes that when he said in his statement:
But this is just the start. After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side 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.
If you want to see what it’s like to play in the Oculus Rift environment, here’s a great video for that. I am not a gamer, not because I don’t like games per se but I find video games to be awkward and confusing. But with Oculus Rift VR, I could see myself enjoying this.
- http://www.reuters.com/article/2014/02/19/us-whatsapp-facebook-idUSBREA1I26B20140219
- http://www.nytimes.com/2014/03/26/technology/facebook-to-buy-oculus-vr-maker-of-virtual-reality-headset.html
- http://blogs.wsj.com/corporate-intelligence/2014/02/19/facebooks-whatsapp-price-tag-19-billion/
- https://www.kickstarter.com/projects/1523379957/oculus-rift-step-into-the-game
- http://www.informationweek.com/software/social/facebooks-whatsapp-buy-10-staggering-stats-/d/d-id/1113927
- http://tech.fortune.cnn.com/2014/03/25/facebook-buys-oculus-vr-a-virtual-reality-gaming-company-for-2-billion/
- https://developer.oculusvr.com/forums/
- http://www.businessinsider.com/why-facebook-buying-whatsapp-2014-2
- http://tech.fortune.cnn.com/2014/03/25/oculus-vr-isnt-a-pre-revenue-startup
Quiddity 
Oculus is diffenetly a better acquisition than Whatsapp considering the scope of gaming. Whatsapp too offers an ease of messaging apart from other stuff but I thing the real reason FB bought it was for that the fact that even though both these platforms were different FB started feeling the competition in the “hangout” segment. The same stuff one could do in FB could do it better and in a more private in Whatsapp. And the question really is will FB make an acquisition everytime it feels a sense of insecurity?
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I don’t see all of FB acquisitions as defensive – Instagram and Whatsapp can certainly be classified as defensive. But Oculus Rift is a strategic move into software in general. It’s a fight for FB to stay relevant and I think they’re doing a pretty good job so far. In fact, before they made these acquisitions, starting with Instagram, I started to question how long before users get tired of Facebook. I don’t ask that question as much these days.
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