Just like we know that Mark Zuckerberg wants to more expand Facebook, so he tries to new experiment with it. So recently, Facebook has announced it will be testing running advertisements within certain VR apps, causing widespread criticism from the virtual reality community. He also clarified that there will be controls to allow you to hide specific advertisers, and the inclusion of ads will be entirely optional for developers. I think this acquisition shows that FB is now moving beyond just being a social network to being a conglomerate that operates in multiple markets and has multiple revenue streams. For that to happen, it has to bet on the next thing and it might very well be VR.
They gave us so many points that what they do or not, just like they clearly mention that currently, they are not using any VR tracking data just like a camera which uses to capture images height, weight, gender or set physical boundaries, in its serving ads. And they serve relevant data that useful for you, but not specifically define that how the type of data will be used to serve you advertisements, information such as app usage and acquisition history seem like obvious choices, as well as data obtained through your mandatorily linked Facebook account. And they are using this most of the employees nearly 10,000 employees in its division working on augmented reality and virtual reality devices. This suggests that Facebook has been significantly accelerating its VR and AR efforts. Since then, Facebook has shifted its VR focus away from Oculus Rift-style tethered headsets by releasing the Oculus Quest and Quest 2, which are standalone wireless devices that don’t require a PC.
Some of the points like why they work for this, Oculus Rift (OR) stays a separate brand for the foreseeable future. Good reviews and attractive price point attracts the early adopters – gaming community to OR. More revenues for FB and more install base of ORs. A new way to experience FB is one of the many apps. This creates network effects and it starts becoming the platform of choice to develop VR apps. Owning a VR set (mostly OR) becomes as normal as owning a smartphone. FB, just like Apple, decides to own the entire stack to provide a much better experience to end-users. Blue-colored FB VR stores anyone? This acquisition is quite similar to Google acquiring Android and owning the “next” platform – mobile. Google accelerated the development and distribution of Android 100x and it now dominates the mobile market.
VR has been a significant part of Facebook’s work for years now, and advertising is how the company makes money. So VR is Facebook’s main opportunity to create their own next-generation platform given that Google and Android are likely to dominate AR. Still, despite the value inherent in owning a platform, Zuckerberg believes that apps ultimately have more leverage than platforms: “If we only build the platform but not the key apps, we may be in a worse position. We need to build both.” I agree with this logic in VR where the apps are likely to be more important than the platform.