The deal is happening in Q2 2014
Facebook announced today it has reached an agreement to acquire virtual-reality headset maker Oculus VR, Inc. for approximately $2 billion -- spread across $400 million in cash and 23.1 million shares of Facebook common stock -- with an extra $300 million earn-out in cash and stock tied to certain undisclosed milestones. The deal is expected to happen in the second quarter of 2014.
"Facebook plans to extend Oculus' existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas," reads a press release. "Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform."
Facebook CEO Mark Zuckerburg elaborated on the acquisition in a post, writing that "We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this.
"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. This is really a new communication platform."
Unexpected, to put it mildly, but this makes sense given the long-term plans of both companies.