Will help it emerge as the next social media platform

Nearly a month after announcing $19 billion acquisition of instant messaging firm WhatsApp, Facebook said it had reached a definitive agreement to acquire virtual reality technology company Oculus VR, Inc., for about $2 billion in a cash and stock deal.

The California headquatered Oculus’ flagship product — Oculus Rift — is a goggle like ‘virtual reality headset’ for video gaming.

Cash and stock offer

Commenting on the acquisition, Facebook founder and CEO Mark Zuckerberg said, “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow.

“Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

The offer includes $400 million in cash and 23.1 million shares of Facebook common stock (valued at about $.6 billion). Besides, the agreement provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

The transaction is expected to close in the second quarter of 2014.

While the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas, the social networking giant in a statement said. “Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform,” it added.

According to Facebook, Oculus has received more than 75,000 orders for development kits for the Oculus Rift. “We are excited to work with Mr. Mark and the Facebook team to deliver the very best virtual reality platform in the world,” said Brendan Iribe, co-founder and CEO of Oculus VR.

“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.”

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