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Facebook gets US antitrust approval to buy headset maker Oculus VR

Facebook gets US antitrust approval to buy headset maker Oculus VR

By Reuters | Updated: 16 May 2014 12:24 IST

Social network giant Facebook has won US antitrust approval to buy Oculus VR Inc, a two-year-old maker of virtual reality goggles, the Federal Trade Commission said on Wednesday.

Facebook said on March 25 that it planned to buy Oculus for $2 billion in its first-ever hardware deal. Facebook Chief Executive Officer Mark Zuckerberg said at the time that the proposed transaction reflected his company's desire to bet on "the platforms of tomorrow."

The deal was on a list of several proposed transactions that have been cleared by the US Department of Justice and FTC. The commission puts out an updated list several times a week.

The Oculus buy was one of several high-profile purchases by Facebook, which recently won antitrust approval to acquire WhatsApp, an instant messaging service for smartphones, for $19 billion. It also bought the photo-sharing app Instagram in 2012.

(Also see: Facebook to buy virtual reality headset maker Oculus VR for $2 billion)

The Oculus VR acquisition marks a big bet by Facebook to anticipate the next shift in an evolving technology industry, at a time when consumers are increasingly abandoning their PCs for smartphones.

The world's largest social network was deemed late to recognize the shift to mobile devices and the company's revenue has only recently begun to recover from the late start.

"We're making a long-term bet that immersive, virtual and augmented reality will become a part of people's daily life," the 29-year-old Zuckerberg had said at the time of the announcement, noting that wearing the Oculus goggles was "different than anything I've ever experienced in my life."

(Also see: Facebook takes page out of Google playbook with Oculus deal)

Many in the industry believe that wearable devices could represent the next big platform shift. Google has been testing Google Glass, a stamp-sized electronic screen mounted to a pair of eyeglasses for several years. Last week, it introduced an effort to develop computerized wristwatches.

Zuckerberg said Facebook was not interested in becoming a hardware company and did not intend to try to make a profit from sales of the devices over the long term. Instead, he said Facebook's software and services would continue to serve as the company's underlying business, potentially generating revenue on Oculus devices through everything from advertising to sales of virtual goods.

(Also see: Visionary or loony? Facebook's Zuckerberg on spending spree)

While Oculus will operate as an independent company, Zuckerberg had at the time stressed that Facebook's plans for Oculus extended well beyond games.

"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," he said.

(Also see: Will Facebook change the future of VR gaming?)

The Oculus deal comprises $400 million in cash and 23.1 million shares of Facebook common stock. Facebook CFO David Ebersman had at the time of the announcement said the price of the deal was based primarily on the gaming business, but that Facebook believed the technology could be worth "multiples" of the purchase price if Facebook succeeds in extending it into other areas such as entertainment and communications.

Edited by NDTV staff from original story by Reuters

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