Strategically we want to start building the next major computing platform that will come after mobile… There are not many things that are candidates to be the next major computing platform. [This acquisition is a] long-term bet on the future of computing.
— Mark Zuckerberg
Palm Pilot and Blackberry predicted the future but failed to capitalize on it
Let’s frame this from a VC lens. A VC would pay big money for a company that has achieved product-market fit and simply needs resources to scale. Until you get to that point, the company should continuously experiment in search of it.
Has Oculus Rift achieved product-market fit? Is Oculus Rift in its current form something the average person will “get” like they did the iPhone, and pay a profitable amount for? Oculus Rift is cool, but it’s not yet there. The company is still trying to find that product-market fit for the masses.
Is this ready for the mass market?
That’s fine. It takes time to figure stuff out. The problem is that $2 billion is not experimenting money; it’s not even product-market fit money; it’s “made it” money. Instagram and Whatsapp have made it; Oculus Rift has not.
For a fraction of $2 billion, Facebook could have started their own Oculus Rift clone if they so truly believed in the concept. After all, it only took Oculus Rift $19 million to get where they are today — 1% of Facebook’s purchase price.