Facebook's Price Tag For Oculus Actually $3 Billion, Zuckerberg Reveals in Court (cnbc.com)

Facebook CEO Mark Zuckerberg revealed in court testimony Tuesday that the company actually paid $3 billion to buy Oculus. From a report on CNBC: His testimony came in a Dallas courtroom, when game maker ZeniMax alleges that Oculus, bought by Facebook in 2014, stole the company's intellectual property. ZeniMax's attorney pressed Zuckerberg on the total Facebook paid for the company. Zuckerberg revealed that beyond the $2 billion price tag, that was widely reported, Facebook paid an additional $700 million to retain employees and another $300 million earnout for hitting key milestones. Nearly three years after Oculus' acquisition Zuckerberg defended against allegations that Oculus stole ZeniMax's intellectual property, also explaining his interest in VR and how it fits into his vision for Oculus.

Comments

$10 million per employee?

[ERJ]

According to this http://www.recode.net/2016/3/24/11587234/two-years-later-facebooks-oculus-acquisition-has-changed-virtual Oculus had 75 employees when it was acquired. So, that $700 million to retain employees works out to a little under $10 million per employee for retention?!?!

I am really in the wrong industry...

Re:$10 million per employee?

[mykepredko]

Why do you think that any of the 75 employees got anything close to $10M a piece? I'd be surprised if even 1% of that amount made it to the employees.

That line item looks like accounting games to make the company look more valuable to Facebook shareholders.

Re:$10 million per employee?

[JustNiz]

Yeah they probably did something like buy a whole bunch of real estate and build a new office building, then claimed they needed to do that for Oculus employee retention reasons.

Re:$10 million per employee?

[geekmux]

Why do you think that any of the 75 employees got anything close to $10M a piece? I'd be surprised if even 1% of that amount made it to the employees.

That line item looks like accounting games to make the company look more valuable to Facebook shareholders.

When accounting "games" amount to 1/3 of the total cost, it tends to question the intelligence and business savvy of the morons buying a bullshit valuation.

Attempts to deny gross stupidity may shine a light on business practices of questionable legality as well.

Re:Vision for VR

[known_coward_69]

figure 10 years down the road you can buy VR tickets to concerts, the superbowl and any other event with limited ticket supply. why pay $1000 to see some old and fat ass band from your childhood cause the scalpers bought all the tickets. buy it on VR and watch it at home from the same angle as front row seats

people i've talked to already prefer watching sports at home compared to watching it live, especially football. this is where VR will be good at

I wonder if he'd like a do-over

[JustNiz]

Unless this was done just as a massive tax-writeoff, then I bet Zuckerberg is kicking himself for it now. There's no way Oculus is worth 3 billion now.
A string of over-greedy and shortsighted decisions by Oculus management (presumably the new people put in place by Zuckerberg after the purchase) totally devalued the product and company. Mostly thanks to marketing strategies such as drivers including always-on spying, making it a closed/DRM'd windows-only platform and store, and also totally underestimating the value of roomscale, In like 6 months Rift went from being the next big thing to a relatively dead duck compared to Steam/HTC Vive.

Re:I wonder if he'd like a do-over

[__aaclcg7560]

I was working at Accolade when it got bought up by Infogrames and later renamed itself Atari after acquiring the IP from Hasbro Interactive. Infogrames was on a buying spree in the run up to the dot com bust. Afterward, with too much debt on the books, they had to sell off the various acquisitions for pennies on the dollar. That's when management figured out they paid two to four times more than the actual value of each acquisition. Needless to say, Atari want back into bankruptcy and came out a very different company.

Re:I wonder if he'd like a do-over

[JustNiz]

I used to love Atari stuff. Their 8 bit computers were WAY ahead of their time.. I remember my mind being blown when I saw Space Raiders at some expo back in the day. I struggled to get the money to buy an Atari 400 and my first significant programming experiences were all from it. I've lost track of exactly what Atari has become and who really owns it. Sadly wikipedia just seems to show its all been split up into tiny parts, all owned by a bunch of different shell companies, with no employees or real assets other than the trademark.
After my Atari 400 I got an Amiga which again was a truly pioneering machine and which I absolutely loved, but sadly Commodore seem to have gone exactly the same way as Atari. I would give my left nut to change history so Microsoft was the company that failed instead of Atari and Commodore.

Re:Vision for VR

[ledow]

You want full-vision, HD-or-above, miniature displays that are self-powered, wireless, and involve no glasses or anything else on you? And probably are selectively transparent?

Welcome to "bio-implants", using tech only available 50 years from now. When you can convince granny to do that to check her email, give us a shout.

Re:Vision for VR

[The-Ixian]

By that time, I am sure camera technology will be such that the VR audience will get views that not even the front row seat holders get. I am thinking body mounted cameras, lots of 360 camera placements and drones.

If done right, you won't even miss the energy of the crowd because you will be as good as there with them.... which then begs the question: Will anyone still want to physically go to these events?

Re:Vision for VR

[fisted]

If done right, you won't even miss the energy of the crowd because you will be as good as there with them....

Sure, if you're fine with a crowd that consists of NPCs.

Will anyone still want to physically go to these events?

Yes. It might be difficult to understand, but some people might go to these events mostly because of other people going to these events.

Re:Doesn't that concern the SEC?

[crypticedge]

Technically they didn't. The extra billion was not cap-ex, but payroll and bonuses. That could have been disclosed to investors very easily without disclosing they were for oculus.

It would have been on the expenses report, but not last I checked, payroll detail reports don't tell you what projects people are working on, just staffing and costs associated to them.

$3,000,000,000

[Jason1729]

No wonder Ole' Zuckey is so so desperate to milk every bit of personal information he can from Oculus.

Re:Vision for VR

[lhowaf]

I heard about a VR game called, "I'm a fudgesicle" that doesn't require goggles.

Re: Vision for VR

[fisted]

If you're suggesting people meeting up in VR (using their avatars or whatever), then still no. Yes, interesting, but no, not the real thing. There's something to human-human interaction that you simply cannot reproduce with VR that's less advanced as what they have in the Matrix.

Think of a party. (I know, we're on slashdot, so just pretend you have ever been to one). Sure I could (if the technology was there) simply stay at home, meet up with my VR buddies on a VR dancefloor, tune the VR to try and reproduce the effects of whatever drugs seem appropriate and Have A Good Night. Will it be able to produce the same hot, sweaty atmosphere, will it properly recreate the feeling (not to mention the sound) of a row of 18" subwoofers? Will I be able to hit on that cute girl over there?

Talk about myopic(sic).

Re:3 billion? Stock holders got fucked

[Carewolf]

They could have chosen to invest in a company that wasn't run by an idiot. I am sure he didn't mean to screw himself over, so proving malice is hard.

Re: Vision for VR

[Bryan Ischo]

You have no clue. But don't feel bad just because you can't afford expensive toys, you probably wouldn't enjoy them anyway. Right?