Abstract

In 2014, the social media giant Facebook acquired Oculus VR, a technologic startup promising to develop a breakthrough technology device: virtual reality (VR) headsets. Facebook CEO Mark Zuckerberg made a bet on future, supported by his vision that virtual reality would eventually be elevated to the rank of computing platform, and ultimately become as ubiquitous as PCs and smartphones. He also believed that Facebook’s scale would be a great asset to drive market acceptance of VR devices. Three years later, impressions about the acquisition’s consequences on both companies as well as on the industry were mixed. In 2017, the two companies were facing integration issues, including a trial for patent infringement. More importantly, the VR industry had gained attention but VR devices were far from mass-market adoption. As a result, experts and neophytes alike were doubting the relevance of Facebook’s decision to invest in the industry. Facing Oculus VR’s CEO resignation, Mark Zuckerberg wondered what strategy he could inject in Oculus VR to eventually evangelize the VR market. The case is the occasion to apply theoretical frameworks, market figures, and historical scenarios to analyze the situation in 2017. The main objective is to discuss Facebook's strategic decision to enter the VR industry and its potential role in driving VR adoption. A second interesting topic resides in innovation-through-acquisition strategies in the technology industry, notably their classic rationale and potential outcomes.

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