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On Oculus Rift and Facebook’s grand acquisitions

Published Mar 26th, 2014 11:18AM EDT
Facebook Oculus Rift Acquisition

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So… Microsoft buys Nokia, Yahoo buys Tumblr, Twitter buys Vine, Google buys Nest, Facebook buys Instagram, Facebook buys WhatsApp, Facebook buys Oculus Rift. Notice the pattern in the recent big tech acquisitions? Facebook is really, really spending big on getting all futuristic.

It may seem like distant past, but Facebook’s acquisition of Instagram was viewed as potentially foolhardy when it happened. The monstrous growth of Instagram and its recent success in the hot micro video segment has pretty much proven Facebook made the right call.

Tuesday’s acquisition of Oculus Rift seems wildly extravagant — paying $2 billion for an exciting, but seemingly niche, high-end immersive gaming technology is kind of loopy. But Facebook apparently views buying the future as a must.

WhatsApp cost $19 billion and monetization of its 400 million users is deep, deep in the future as long as Facebook keeps its pledge to not hammer the service with ads. To some extent, Twitter and Google are acting like Facebook, though on a more modest scale.

Twitter’s Vine acquisition took place before the service exploded to becoming the No. 1 app in America in June 2013; at the time when the transaction cleared, the concept of 6-second video clips becoming a major new product category was theoretical at best.

Google’s Nest purchase is also fairly daring, although it’s a lot easier seeing sentient thermometers going mainstream before virtual reality gear.

Everyone is buying the future — products and concepts that just might become huge revenue generators around 2022.

Everyone except Microsoft.

Even as its rivals from Yahoo to Google to Facebook look deep into the next decade, Microsoft is looking into the past. Namely the year 2007, when Nokia was among the hottest tech companies in the world, delivering 20%-plus operating margins and had a 60% smartphone market share.

While everyone else is trying to play Pip, a young man of great expectations off to conquer London, one tech giant is playing mad Miss Havisham, sitting by the dinner table and idly toying with the decaying lace decorating the wedding banquet table.

If only the glittering past could be recaptured.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.