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Worst case with Facebook:

     - It would signal a shift toward gimmicky experiences targeting a
       casual market that wouldn't spend several hundred dollars on a
       piece of esoteric hardware.
     - It would spoil an opportunity to partner with a company that has
       much more experience in hardware, gaming, dev tools, or anything
       else Oculus could use to take off.
     - The likely integration with Facebook's authentication and social
       services will cause the product to suffer from all the ill will and
       distrust Facebook has generated within parts of its userbase and
       the developer community. Branding is important, and to these
       communities - the ones Oculus likely needs to take off - Facebook's is poison.

An acquisition by Zynga or Gree might've been almost as bad, but any of the other companies mentioned wouldn't have signaled such a shift, and such a betrayal of the intent of the initial kickstarter investors and hopes of its supporters. Oculus appears to gain nothing but money from this deal. I'd say the announcement alone squanders Oculus' only relevant lead over Sony and others.

  What is is a specific likely worst-case 
  you have in mind with Facebook?

That they realise there's no overlap between their products, so they discontinue the VR products and transfer the employees to web ad targeting.

More precisely they make a play for the "VR socialisation" arena but it's a half-hearted attempt because VR socialisation is some manager's pet project rather than their core business, facebook vr socialisation goes the way of Second Life, and the consequence is the same.

> *[Facebook] discontinue the VR products and transfer the employees to web ad targeting"

Oculus has 50 employees [1]. Facebook did not pay $40 million per employee to scrap their product.

Oculus is also a bleeding-edge hardware start-up. It was more likely to drop dead all on its own than at the hands of well-capitalised owner.

[1] http://www.crunchbase.com/company/oculus-vr

$40 million.

  Facebook did not pay $400 million per employee 
  to scrap their product.

If paying a lot makes acquisitions succeed, maybe facebook should have paid more to make the acquisition even more successful :)

This deal reminds me of ebay buying Skype: Two technology companies, both with reasonable products, but nothing to do with each other.

Nothing to do with each other, but eBay made $1.4B on the deal.

I see the absence of overlap as a good thing. It means it's highly unlikely that Facebook threw down $2 billion for some gimmicky social integration that a tiny sliver of their userbase could harness.

The Oculus team is cutting-edge hardware along a completely different vertical, orthogonal to facebook's core. Despite their size they have the talent and expertise to create that entire market by themselves, provided adequate funding. Facebook does not have to interfere at all, beyond writing the cheques. Over three years, Facebook could have itself a new gaming product to compete with Sony and XBox... in five, it might have an innovative consumer device to take on Apple. The conglomerate model typically has better odds of long-term survival - what happens when people grow tired of social in its current form (primarily content curation)? Then facebook's flagship product would be obsolete.

Microsoft have history dealing in-depth with education, business and gaming, plus hardware, operating systems, mobile and so on. Facebook's core appears to be social and a little more superfluous.

Microsoft has a history with gaming because they built the Xbox. Facebook will have a history with gaming, hardware, and more because they will build the Oculus.

Microsoft pushed gaming long before the XBox. The XBox was just the next step.

Actually, I'm surprised that Apple didn't get to Oculus. Apple has a history of being a catalyst in markets that are not yet matured. They did it with the iPod, iPhone, and iPad. All of them were preceded by plenty of products that perhaps looked very similar on paper, but were a completely different (clunky) experience to use until Apple showed the market how it's done.

Oculus might've been what the Macs needed in order to take gaming market-share from PCs. Missed opportunity for Apple. In my opinion, would've been a bargain for them at $2B.

The true innovators maybe are the ones that exist by themselves without being "acquired", or before they get acquired (Apple was, is and will probably surprise again in the future, as will Google and Microsoft)

Once they get acquired...well...Skype Hotmail etc etc...(who are they again?)

And that's ok I guess, there's a lot of drive to create and grow (hack?), being top efficient and innovative on a shoe string budget, until you get a nice big fat pay check.

Maybe the little guys with big ideas are only "useful" until they get acquired, by that I mean that maybe it's more of a natural process that one thinks... Maybe by the time the technology is "invented", showcased and becomes stable enough to be "mainstreamed", it's time to collect your dollars and medal for "honourable service to xxxxx industry" and either move onto something else that will be cool and make you more (or less) money eventually and produce more internet "apps" addicts, or retire to the beach.

I'd be interested to know what you think of Twitter as a potential owner.