This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook and Oculus Aren't Just About Games

That doesn't mean there hasn't been a lot of interest surrounding Oculus, noted Sterne Agee analyst Arvind Bhatia. "Oculus VR has been getting traction in the gaming industry and at the recent Game Developers Conference (GDC) this year, virtual reality in general and Oculus VR in particular, received a lot of attention," Bhatia wrote in a note to clients. "While gaming will be the near-term opportunity for Oculus VR's technology, Facebook envisions applications in other forms of entertainment and communications with the ultimate goal of helping it become 'the most social platform ever.'"

By doing this deal, Facebook moves slightly away from its core functionality, social networking and keeping everyone connected. Both the Instagram and WhatsApp deals were about connecting people and sharing, and it's hard to argue with the success. On the call, Zuckerberg noted Instagram had surpassed 200 million users, and WhatsApp is well on its way toward 1 billion users.

This deal is more focused on the next computing platform, similar to what Google (GOOG - Get Report) has done with Android. Piper Jaffray analyst Gene Munster, who rates Facebook "overweight" with a $67 price target, said this might be Facebook's "Android moment."

"We view the most interesting aspect of the acquisition is that it is in our opinion the first major acquisition that Facebook has made that is offensive," Munster wrote in a report, noting Facebook was acting forward-thinking like Google. "While one could argue, Instagram and WhatsApp as offensive in hindsight, we believe those platforms both threaten Facebook's core grasp on social time spent. We believe that Oculus is a big bet on the future of visual computing and we may see Oculus as Facebook's 'Android' moment 10 years from now and understand the point of the acquisition."

Virtual reality is still a long ways away from becoming a mainstream platform, and it's no guarantee it will get here. Personal digital assistants (PDAs) never really took off, and tablets were around for quite a while until Apple (AAPL) introduced the iPad in 2010, to name two examples. Still, people believe that virtual reality is coming, whether we like it or not.

"We're in the silent movie stage, and we're just starting to flesh out what opportunities are," Brouchoud said. "This tech enables shared experiences, travel to outer space, it's more about taking friends on a new voyage. I don't think we've even scratched the surface with what's possible."

-- Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
FB $78.99 0.00%
GOOG $537.90 0.00%
AAPL $128.95 0.00%
TSLA $226.03 0.00%
YHOO $42.51 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs