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Facebook's shopping spree

Money is interesting stuff.

In of itself, cash is greatly over-valued.

Whether it's coin or notes, the face value of currency far exceeds its actual worth -- at least that's the case since we stopped minting our coins from precious metals such as gold and silver.

It's little wonder therefore that cash-rich Facebook is keen to run around and spend its money (and its shares) as quickly as possible. Given that cash-deposit interest rates are now at their lowest levels in decades, it makes sense to spend your cash on assets that will deliver much greater returns.

As a result of this commonsense, we've seen Facebook looking to invest in solar-powered drones which will act as an alternative to satellites and now they're forking out an obscene amount of money for another bit of cutting-edge tech.

The target of Facebook's wallet is Oculus, the US company which has been working (for quite some time it must be said) on a virtual-reality headset that delivers breakthrough performance.

Virtual reality glasses are nothing new. Crude attempts based on very low resolution displays and driven by excruciatingly weak processors were first promoted back in the 1980s. Unfortunately, due to their limitations, they were never much more than a curiosity.

The Oculus Rift (OR) however, threatens to bring full HD video and totally interactive head-tracking with low latency to the party.

With computer gaming now being one of the world's most profitable industries and totally eclipsing the motion picture industry in both turnover and profit, the market for the OR is enormous -- and Facebook knows it.

Mark Z might have to be a little careful though -- Sony has just announced what could be an OR-killer in the form of their own HD virtual-reality glasses which look a whole lot more stylish than the Oculus product and will have an immediate marketing and distribution advantage.

Facebook may have already encountered some resistance to its acquisition of Oculus with the creator of Minecraft, Markus Persson already tweeting that he's severing ties with the VR company in the wake of the take-over. Persson claims that Facebook "creeps me out" and as a result of the ownership change, has just cancelled a deal he had been negotiating with Oculus.

What's more, due to its PlayStation product, Sony is in a position to integrate the VR hardware with its gaming platform in a way that 3rd-party companies might find difficult.

In fact, I have to wonder what the real thinking is behind Facebook's spending spree of late. The portfolio of ventures they're buying up certainly seems to have quite a speculative and high-risk element to it. Both the solar drones and the OR are products which have not yet been completed to the point where they can be sold to the market and experience shows that a huge number of such projects collapse and die just before crossing the finish line.

I wait and watch with interest to see what Facebook will snap up next.

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