Oculus Cost $3B To Facebook... Not $2B

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Oculus Cost $3B To Facebook... Not $2B
January 18, 2017
Mark Zuckerberg demonstrates an Oculus Rift virtual reality headset and Oculus Touch controllers as the gives a demonstration during the Oculus Connect 3 event in San Jose on Oct. 6, 2016.

 

Back in March 2014, Facebook announced it acquired Oculus, the "leader in immersive virtual reality technology, for a total of approximately $2 billion." 

 

Turns out that was fake news — or maybe just a poorly written lede. 

 

Facebook did acquire Oculus, but the price tag was much larger than previously stated and widely reported. The realization came after the attorney for video game maker ZeniMax Media (which is suing Facebook for allegedly stealing the intellectual property) directly asked Facebook CEO Mark Zuckerberg in court testimony Tuesday.

 

Facebook paid $2 billion for the company plus an additional $700 million to retain employees and $300 million for earn-out, he said. That brings the total cost to bring Oculus under the Facebook umbrella as $3 billion. 

Facebook stated in its own press release at the time that the company issued $400 million in cash, common stock valued at $1.6 billion and $300 million earn-out. With those numbers, the press and Facebook continuously low-balled the "approximately $2 billion," and simply neglected a cool $700 million. 

 

Oculus had approximately 75 employees at the time of the acquisition.

 

Even with the new price tag, Oculus is far from Facebook's most expensive deal to date. Facebook acquired WhatsApp for $19 billion in 2015. 

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