Zuckerberg: Facebook Will Continue to ‘Invest Heavily’ in Virtual Reality

Social giant closed $2 billion acquisition of VR company Oculus this week

Zuckerberg: Facebook Will Continue 'Invest Heavily' Virtual Reality
Win McNamee/Getty Images

Facebook founder and CEO Mark Zuckerberg said the social giant — which completed the $2 billion acquisition of virtual-reality company Oculus this week — will continue to “invest heavily” in building out VR and related technologies over the next several years.

“There are huge opportunities to build the next generation of computing platforms,” Zuckerberg said on Facebook’s second-quarter earnings call.

The rationale: Facebook has “mostly been a company that has played on top of the mobile foundations that other companies have built,” he said. Facebook was late to the mobile space, but has seen strong growth in its mobile business in recent quarters and the segment now represents the majority of its ad revenue.

With VR, Zuckerberg sees a chance to define the next set of computing platforms. “We’re going to spend a lot and invest heavily to get it right over the long term,” he said. He added that Facebook’s development of artificial-intelligence technologies will be part of what the company sees as a future platform for communications.

The Oculus Rift headset was designed to provide an immersive experience for videogames. Facebook — which bought two-year-old Oculus before it launched the VR system as a consumer product — plans to extend it to other areas, including communications, media and entertainment, and education. The acquisition has some VR enthusiasts worried that Facebook will derail the startup’s original videogame focus.

SEE ALSO: Oculus Rift Just Put Facebook in the Movie Business

Zuckerberg also touted the potential for autoplay video on the website, as providing more engagement with users. In addition to the video ads Facebook has started selling — to advertisers including NBC — the company want to ramp up “organic” video content from users, he said.

Facebook will remain a place for short-form video, he noted: “You are not going to come to Facebook to watch a movie or a TV show — that’s long-form stuff.” The value of the site is providing “unique types of content that you can’t get anywhere else,” citing Shakira’s thank-you video to fans when she topped 100 million “likes” on Facebook last week.

Facebook topped Wall Street expectations for Q2, posting revenue of $2.91 billion, up 61% year over year, and of $791 million, up 138% versus $333 million in the year-earlier period. Mobile ad revenue approximately 62% of advertising revenue for the most recent quarter, up from approximately 41% from Q2 2013.

As of June 30, Facebook had 1.32 billion monthly active users overall, up 14% year over year, and mobile active monthly users at 1.07 billion, an increase of 31%.

Also on the earnings call, Facebook COO Sheryl Sandberg noted that the 2014 FIFA World Cup was a high-activity event for the service, with 350 million users worldwide generating 3 billion interactions related to the soccer tourney. She called out an advertising deal with McDonald’s, in which soccer players were represented by French fries, which was seen by 125 million Facebook users.

Facebook now has 1.5 million active advertisers, with more than 30 million small businesses hosting pages on the site, Sandberg said. With its recent acquisition of video-advertising technology firm LiveRail company, Facebook wants to expand video ads to publishers off the social site, Sandberg said.

Meanwhile, CFO Dave Wehner said Facebook’s $16 billion acquisition of mobile-messaging firm WhatsApp is still expected to close by the end of the year.