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NEWS: Facebook acquires reality headset maker

Facebook has announced it has reached an agreement to acquire reality headset start-up Oclus VR for approximately $2 billion.

Oculus is the leader in immersive virtual reality technology and has already received more than 75,000 orders for development kits for the company’s gaming virtual reality headset: the Oculus Rift. Facebook plans to utilise the technology across new sectors, including communications, media, entertainment and education. However, Oculus will maintain its headquarters in Irvine, CA.

The deal includes $400 million in cash and 23.1 million shares of Facebook common stock. The agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

Mark Zuckerberg, Facebook founder and CEO, said: “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Patrick Salyer, CEO of Gigya, commented on the news: “Facebook's acquisition of Oculus is about more than Facebook merely attempting to get into an emerging market (virtual reality). Rather, with this acquisition, Facebook is attempting to extend and own identity within the internet of things.

“There's an amazing amount of value for Facebook, its users and brands in allowing users to leverage their Facebook identities on different VR programmes. This permission-based identity data could be tied to user activities that take place within those VR programmes which opens up some very interesting personalisation and targeted marketing opportunities for brands. When it comes to war for identity on the web, Facebook clearly understands the stakes. Acquiring Oculus should give the world's largest social network a big boost as VR becomes a mainstream technology in the next few years."

The transaction is expected to close in the second quarter of 2014.