Facebook: The Social Standard - Initiating Coverage With A $155 Price Target
Altum Research • 97 Comments
Altum Research • 97 Comments
Mon, May 23, 1:45 PM
- Facebook (FB -1%) has acquired Two Big Ears, a developer of software/technology for creating spatial audio for VR content and 3D audio for games. Terms are undisclosed.
- Two Big Ears is now making its authoring tools, encoder, and rendering engine for "cinematic VR and 360 [degree] video" free. On the other hand, it's no longer offering its 3D game audio solution, but will instead work "with the Oculus team to combine our expertise and create best in class VR audio."
- Oculus, less than two months removed from beginning shipments of its first commercial Rift headset - it costs $599, and needs to be paired with a PC sporting a powerful graphics card - is often seen as having an early hardware and software technology lead. But there's plenty of competition: HTC recently began shipping its Vive VR headset, and Sony's PlayStation VR headset (works with the PS4) will ship later this year. And last week, Google unveiled its Daydream VR platform, which will work with compatible Android phones and compete with Samsung/Oculus' $99 Gear VR headset (less powerful than the Rift).
- In 2014, Oculus bought Nimble VR, a startup working on skeletal hand-tracking solutions, as well as 13th Lab, a startup working on technology to acquire and reconstruct 3D models in real-time.
Jul. 16, 2015, 10:16 AM
- Facebook's (FB +0.2%) Oculus VR unit has acquired Pebbles Interfaces, an Israeli developer of "technology that uses custom optics, sensor systems and algorithms to detect and track hand movement." The WSJ reports the purchase price is around $60M.
- Pebbles, which has 50 employees, will join Oculus' hardware engineering and computer vision teams to "help advance virtual reality, tracking, and human-computer interactions." Oculus is a month removed from unveiling (along with the first consumer Rift model) its Oculus Touch handheld motion controllers. The controllers work with Rift apps/games, and support 360-degree movement and haptic feedback.
- Oculus hasn't been shy about using acquisitions to help maintain its VR tech lead. Last December, it bought hand-tracking tech developer Nimble VR, and 3D model-creation startup 13th Lab.
- Separately, Facebook has begun testing the creation of full-blown e-commerce shops within business pages. The solution, which could help improve conversion rates (and thus ad prices) for Facebook ads, follows the recent launch of a Buy button.
- Past acquisitions of Israeli gesture-recognition firms: PrimeSense (acquired by Apple), Omek Interactive (acquired by Intel)
Apr. 22, 2015, 2:50 PM
- Ahead of Facebook's (FB +1.1%) afternoon Q1 report, Germany's Manager Magazin reports the social networking giant has expressed interest in Nokia's (NOK +1.7%) HERE mapping/navigation services unit. Uber, a consortium of German automakers, and a P-E firm have also reportedly shown interest.
- The report comes after Nokia stated it's exploring options for HERE ahead of a planned merger with Alcatel-Lucent. The unit, which has had a tough time competing against Google Maps in Web/mobile mapping but has fared better in the automotive market, has been assigned a book value of €2B ($2.14B) by Nokia; many think it can fetch a higher price.
- Facebook's PC site currently relies on Bing Maps, and its mobile apps on Google Maps. Owning a mapping platform could help Facebook deliver a better experience when integrating user/business data and local services with maps.
- Separately, Facebook has launched Hello, an Android phone dialer app that relies on publicly-shared Facebook profile info to provide caller ID data and photos. No iOS version will launch due to Apple's app restrictions.
- Hello (currently available in the U.S., Brazil, and Nigeria) also adds Facebook profile pictures and info to a user's contact book, integrates with Messenger to support free VoIP calls, and features a search bar that can be used to search for contacts/businesses. Much like the Home Android UI (hasn't lived up to expectations), it aims to strengthen Facebook's mindshare and engagement with Android users.
- Shares are higher ahead of earnings. Though generally expecting strong numbers, several analysts have been slightly cautious due to forex concerns and high expectations; ad partner Nanigans recently reported solid Q1 figures.
- Update (6:40PM ET): Bloomberg also reports Nokia, German automakers, and P-E firms are looking at HERE. It adds Nokia has reached out to Apple, Alibaba, Baidu, Amazon, Sirius, and Harman. First-round bids are reportedly due at the end of next week.
Mar. 13, 2015, 11:07 PM
- Facebook (NASDAQ:FB) has bought TheFind, an online shopping search engine that lets users compare listings from Amazon, eBay, Walmart, Target, and many other online retailers/marketplaces - the startup claims to index more than 500M products across 500K stores. Terms are undisclosed.
- While announcing the deal, TheFind says its search engine will be shuttered within the next few weeks, but adds it will be "working hard to integrate our technology to make the ads you see on Facebook every day better and more relevant to you."
- A source talking to AdWeek states Facebook will use TheFind to deliver better retargeted ads (i.e. ads based on activity on non-Facebook sites/apps), something that could yield better ROIs and ad prices. "Say you're looking at a pair of jeans on the Gap's website. You won't see those ads after you buy them."
- Facebook already does plenty of business selling retargeted e-commerce ads within its news feed, and on its site's right-hand column. However, delivering relevant product ads to consumers is still often a challenge, as it is for many other retargeted ad platforms.
- The acquisition comes just a month after Facebook launched a news feed ad unit meant specifically for product ads, and for which ads are tailored to a user's activity and interests. The company has also been testing out a Buy button that could improve ad ROIs/prices by allowing users to make purchases without leaving Facebook's site/apps, using payment data previously saved to their accounts.
Jan. 5, 2015, 5:58 PM
- Facebook (NASDAQ:FB) has bought Wit.ai, creator of a voice recognition tech platform that breaks down voice commands into structured information (a user's intent, dates and places mentioned, etc.). Terms are undisclosed.
- Wit.ai claims its platform is used by over 6,000 developers, and is "already powering hundreds of apps and devices." TechCrunch speculates Facebook could use Wit.ai to "build voice control into its development platform, aid with voice-to-text input for Messenger, improve Facebook’s understanding of the semantic meaning of voice, and create a Facebook app you can navigate with your voice." Oculus is another possibility.
- Facebook, which has already given 3rd-party developers plenty of free tools with the goal of keeping them actively supporting its platform (and perhaps its ad products?), plans to keep Wit.ai's platform freely available.
- Like other tech giants, Facebook has shown a keen interest in natural language-processing for some time.
Dec. 11, 2014, 7:02 PM
- Oculus VR (NASDAQ:FB) has bought Nimble VR, a startup said to be developing "machine learning and computer vision capabilities to enable high-quality, low-latency skeletal hand tracking."
- It has also bought 13th Lab, a startup working on creating "an efficient and accurate" way to acquire/reconstruct 3D models in real-time. Oculus: "The ability to acquire accurate 3D models of the real-world can enable all sorts of new applications and experiences, like visiting a one-to-one 3D model of the pyramids in Egypt or the Roman Colosseum in VR."
- Also: Oculus has hired NYU prof./motion capture expert Chris Bregler. Bregler, who has done work for Disney, H-P, and LucasFilm, will be directing a "vision research team" at Oculus.
- The moves drive home Oculus' long-term goal of seeing its VR platform used for applications that go well beyond gaming. They follow Samsung's recent launch of the Oculus-powered Gear VR, The Gear VR, which sells for $199-$249 and relies on a Galaxy Note 4 to provide its display and camera, is aimed at developers and early adopters rather than mainstream consumers.
- Meanwhile, Mark Zuckerberg states during a Q&A session Facebook has been thinking about adding a "dislike" button, albeit while cautioning he doesn't want it to act as a way to shame users. Zuck suggests the button could act as a way to express sympathy over a sad event.
Sep. 2, 2014, 1:53 AM
- EU regulators are now soliciting feedback from Facebook's rivals and telecoms operators, after setting an Oct. 3 deadline to decide whether to clear Facebook's (NASDAQ:FB) $19B offer for WhatsApp.
- In a questionnaire sent to third parties, the EU competition watchdog asked if the deal would have a negative, neutral or positive impact on users of mobile messaging and social networks.
- U.S. regulators already gave the deal a green light in April.
Sep. 1, 2014, 6:30 AM
- EU antitrust authorities will decide whether to clear Facebook's (NASDAQ:FB) $19B offer for WhatsApp by Oct. 3.
- U.S. regulators have already cleared the takeover in April, provided WhatsApp sticks to its current privacy practices after the merger, including not to use users' personal data for targeted ads.
Jul. 2, 2014, 2:24 PM
- Facebook (FB -2.1%) is buying LiveRail, owner of a video ad tech platform that connects publishers/content providers such as Gannett, Dailymotion, A&E, and the MLB with video ad inventory.
- The price is undisclosed, but should be substantial: LiveRail was on a $100M/year run rate last fall on the back of 300% Y/Y revenue growth, and was eying a possible 2H14 IPO. The startup serves 7B video ads/month, and is part of a burgeoning market for programmatic (automated/algorithm-driven) video ad platforms.
- Rivals include Google's DoubleClick unit, AOL's Adap.tv unit, Tremor Video, (TRMR -2.5%), and YuMe (YUME -0.3%). LiveRail has argued its publisher-centric approach sets it apart. "We've reached a point where the market is larger, more mature and more competitive. You need to be the best at one thing in order to differentiate."
- Facebook: "We believe that LiveRail’s excellent product ... and Facebook’s expertise with relevancy, delivery and measurement will help us make video advertising much better for everyone." The company is just months removed from launching its news feed video ad product.
- Facebook shares have slipped following the announcement, as have Tremor's.
- Earlier: Facebook roundup
- Update: A source tells TechCrunch Facebook paid $400M-$500M. (h/t Charles Moscoe)
Jun. 24, 2014, 4:54 PM
- Oculus VR (FB) is buying hardware R&D firm Carbon Design for an undisclosed sum. The deal is expected to close by summer's end.
- Oculus, interested in making its VR headsets smaller, lighter, and cheaper, says Carbon "officially become a key component of the product engineering group at Oculus." The firm designed the Xbox 360's controller, among other products.
- Separately, Oculus CEO Brendan Iribe states his company is looking for hardware partners to boost adoption of its VR platform. "If we do want to get a billion people on virtual reality, which is our goal, we’re not going to sell 1 billion pairs of glasses ourselves.”
- Iribe adds Oculus has held initial talks with Sony (recently unveiled its rival Morpheus VR headset) and other hardware firms, and that the company likely won't form partnerships until a consumer version of the Oculus Rift (currently available via dev. kits) is launched.
- Engadget reported in May Oculus is partnering with Samsung on a mobile/media-focused headset that will will feature a slot to insert a smartphone (and thus make use of its display and rear camera).
- Earlier: Cantor upbeat on Facebook's video ads
Jun. 5, 2014, 4:03 AM
- WhatsApp co-founder Brian Acton has voiced his concerns over gaining new users for the messaging service. "Growth in the United States is a challenge for us," says Acton. The co-founder also related that in Japan and Taiwan "we could have been more successful with a little bit more effort."
- Despite the challenges, Acton believes the $19B buyout from Facebook (FB) will send 1B new users to his social network and generate substantial revenues.
- WhatsApp services are still due to remain apart from Facebook's in a policy Acton refers to as "separate but equal." Merging the services would create "risk and peril."
Jun. 3, 2014, 10:10 AM
- Facebook (FB +0.2%) is buying Pryte, a Finnish startup that allows carriers to offer cheap, short-term mobile data packages covering popular individual apps. Terms are undisclosed.
- Both Facebook proper and WhatsApp have been trying to strike deals with foreign carriers to provide subsidized access to their services; the latter has arguably made more progress than the former.
- In April, WhatsApp launched a €10 ($14) prepaid SIM card in partnership with Germany's E-Plus that provided unlimited access to its services (no data charges).
- A big chunk of the mobile messaging leader's base is in emerging markets where a piecemeal approach to mobile data services could go over well with cost-sensitive consumers.
Apr. 10, 2014, 3:47 PM
- The FTC's approval of the Facebook/WhatsApp (FB -4.6%) deal was widely expected, given Facebook Messenger and WhatsApp (though collectively having a sizable mobile messaging share) face competition from a long list of rivals that includes Line, Viber, Skype, and BlackBerry. EU approval remains outstanding.
- Though signing off on the deal, the FTC cautions WhatsApp needs to honor existing privacy commitments made to its users; EU regulators have raised privacy concerns of their own. Facebook settled an FTC privacy probe in 2012.
- Facebook is giving back a big chunk of yesterday's gains as the Nasdaq turns in its ugliest day in years. Thanks to Facebook's recent selloff, the price tag for the WhatsApp deal has fallen by $1.4B to $17.6B.
- Yesterday: Facebook removing Messenger from core apps
Mar. 26, 2014, 1:10 PM
- Google (GOOG -0.4%) appears to have "seriously sniffed around" Oculus VR before Facebook (FB -3.8%) closed a deal to buy the VR headset maker, Kara Swisher reports. Meanwhile, The Verge reports "several big companies" had made overtures to Oculus (no names are given), and that the startup's VC investors "offered the company more money to go it alone."
- Over time, Oculus' Rift headset, which Facebook hopes will be used for many non-gaming applications, could compete against Google Glass. For now, they address different markets: Rift is much heavier/bulkier than Glass, but also provides an immersive VR/3D gaming experience.
- During a CC, Mark Zuckerberg asserted the Rift is "way ahead" of rival products such as Sony's (SNE -0.4%) Morpheus (due in 2015), and that Oculus' talent is unmatched. Oculus CEO Brendan Iribe argues Facebook's resources will help make the Rift cheaper (the dev. kit currently goes for $350).
- Stacy Higginbotham remains an Oculus skeptic: While calling a demo she tried out "immersive and neat," she adds it was "nothing like real life." Brad Stone thinks "there's nothing social" about headsets that "[blot] out absolutely everything around you."
- Jim Edwards, defending the deal, calls the Rift the kind of product for which words can't describe "how incredible the experience of wearing one is." VC Chris Dixon, who backed Oculus, makes a similar case.
- Some game developers are unhappy about the deal. As are some of the Kickstarter backers who poured $2.4M into Oculus, and only have t-shirts and dev. kits to show for it. Facebook has joined several other Internet momentum stocks in selling off in the wake of King's disappointing IPO.
- Previous: Facebook buying Oculus, more details
Mar. 25, 2014, 6:33 PM
- "Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles ... Imagine sharing not just moments with your friends online, but entire experiences and adventures." writes Mark Zuckerberg in a Facebook (FB) post, explaining why his company is spending up to $2.3B to buy a VR headset maker.
- Nonetheless, Zuck suggests Oculus will initially focus on its gaming opportunity. Last week, Oculus began taking pre-orders for its second-gen developer kit - it includes an updated Rift VR headset sporting a higher-res display and a camera that allows users to reposition their heads.
- Oculus CEO Brendan Iribe promises the Rift will get much more comfortable and portable over time. "A decade or two from now, it will be nothing but sunglasses." If/when that happens, Rift might be squaring off against Google Glass.
- A weekend NYT column discussing Oculus and Sony's headsets: "After trying an array of prototypes and development kits ... I can assure you that virtual reality works. Technology is no longer the limitation. The lingering question is what game designers, artists and filmmakers should do with it."
- The fact Facebook is mostly paying for both Oculus and WhatsApp with shares that have soared over the last 8 months, even though the company has $11B+ in cash/investments and could obtain cheap debt, hasn't gone unnoticed.
- FB -0.9% AH
Mar. 25, 2014, 5:39 PM
- Facebook (FB) is buying Oculus VR, developer of a virtual reality headset that has made waves in the gaming community (the Oculus Rift), for $400M in cash, 23.1M shares (current value of $1.6B), and $300M in performance earn-outs. The deal is expected to close in Q2.
- Facebook notes Oculus has received 75K+ orders for its development kits, and says it plans to apply the company's technology to verticals beyond gaming, including communications, education, and media.
- Mark Zuckerberg: "Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow ... Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."
- Sony recently announced a PlayStation 4 VR headset expected to be available next year, and Microsoft is reportedly working on a VR headset for the Xbox One.
- CC at 6:15PM ET.
Facebook, Inc. is a social networking service and website. Its website allows people to communicate with their family, friends, and coworkers. The company offers advertisers a combination of reach, relevance, social context, and engagement to enhance the value of their ads. Its services include... More
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