Mark Zuckerberg, founder and CEO of Facebook observes:
Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together. I can't wait to start working with the whole team at Oculus to bring this future to the world, and to unlock new worlds for all of us.
The deal includes $400 million in cash plus 23.1 million shares of Facebook common stock (valued at $1.6 billion). If "certain milestones" are met, the company will receive an additional $300 million earn-out in cash and stock.
Facebook reportedly plans to take Oculus technology to "new verticals" - specifically targeting communications and education. "Virtual reality technology is a strong candidate to emerge as the next social and communications platform," says the company in a statement.
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.
Brendan Iribe, co-founder and CEO of Oculus VR continues:
We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world. We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it's only just the beginning.
Oculus will continue working on the Rift from its Californian HQ. The transaction is expected to close in the second quarter of 2014.