NEW YORK (TheStreet) - Facebook (FB_) CEO Mark Zuckerberg revealed the company’s thinking process around its three, five and ten year strategy in a conference call with analysts to explain the social network’s $2 billion acquisition of Oculus VR, a virtual reality platform that venture capital investors in the company compare to Silicon Valley’s biggest breakthroughs such as the Apple (AAPL_) II, the iPhone, the Macintosh, Netscape and Google (GOOG_).
Investors puzzling over Facebook’s apparent entrance into virtual reality may be heartened by the clearer picture of the company’s medium-to-long-term thinking provided by CEO Zuckerberg. They also may be comforted by Zuckerberg’s increasing confidence that Facebook has solved its problems in bringing more than 1 billion monthly active users (MAUs) to mobile devices.
Those two developments, expressed on Tuesday evening in a call with analysts, may have more bearing on Facebook’s share price than the immediate impact of the Oculus VR acquisition. The company Facebook is acquiring is still in the process of developing its next generation product after using crowd-funding platform Kickstarter to raise $2.4 million to develop its first product, Oculus Rift.
While Facebook is shelling out $400 million in cash and $1.6 billion in stock for Oculus VR, in addition to an additional $300 million earn-out in cash and stock incentives, Oculus VR is unlikely to have any impact on the company’s earnings in the next few years.
On Tuesday, Facebook was unwilling to provide specific financial guidance on the acquisition or how it came upon a price, but CFO David Ebersman noted that the company focused on the games business because it’s the furthest along. It is worth noting no bankers were hired to advise Facebook’s acquisition, indicating CEO Mark Zuckerberg is confident he can be an effective dealmaker in Silicon Valley.