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Facebook Spends $2 Billion on Virtual Reality Technology

The social media company will acquire Oculus VR, Inc. in the second quarter of 2014 to develop virtual reality as the next social and communications platform

Facebook has reached an agreement with Oculus VR, Inc. to acquire the leading virtual reality technology company for approximately $2 billion, the social network announced on Tuesday.

The deal includes $400 million in cash and 23.1 million shares of Facebook common stock, plus 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.

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Although utilizing virtual reality for anything beyond gaming purposes is in early stages of development, Facebook hopes to extend Oculus’ existing advantage to new verticals, including communications, media and entertainment, education and other areas.

The social media company, founded by CEO Mark Zuckerberg in 2004, believes virtual reality technology is a strong candidate to emerge as the next social and communications platform.

Oculus has already built strong interest among developers. The Irvine, CA-based company has received over 75,000 orders for development kits for the company’s virtual reality headset, the Oculus Rift, which it will continue to develop.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Zuckerberg said in a statement. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”