Facebook buys Oculus VR, a virtual reality gaming company, for $2 billion

from cnn


By Erin Griffith March 25, 2014: 6:08 PM ET

Zuckerberg views gaming headset as a "new communication platform."

FORTUNE -- Facebook's deals are becoming the stuff of legend. In the last few months alone, Mark Zuckerberg has spent $19 billion on a messaging app, and reports say he's paying $60 million for a drone company. Today he announced Facebook's latest head-scratcher: $2 billion for Oculus VR, the maker of a virtual reality gaming headset called Oculus Rift.

It marks the third time Facebook has paid a billion dollars or more for a company with little to no revenue, with plans for it to operate independently. (Oculus has sold 75,000 pre-orders for development kits, which cost $350, giving it approximately $26 million in income.)

Facebook (FB) will pay $400 million in cash, with 23.1 million shares of Facebook common stock valued at $1.6 billion, the company said. In addition, the deal includes a $300 million earn-out in cash and stock. Oculus got its start on Kickstarter, but went on to raise $93.4 million in venture funding from Spark Capital, Matrix Partners, Founders Fund, Formation 8, BIG Ventures, and Andreessen Horowitz.

So: Why? Is Oculus Facebook's answer to Google Glass? Is it the social network's desperate attempt to inject itself with fresh innovation? Is it a cynical play for Oculus VR's legendary CTO, John Carmack? Does Facebook want to fill a Zynga-shaped hole in its games-related revenue?

According to a Facebook post from Zuckerberg, he views Oculus Rift as a communication platform. The company and its 75 employees will operate independently from Facebook and continue their path of developing a platform for virtual reality games. (This, by the way, marks the third time Facebook has veered from its acqui-hire strategy of shutting down the companies it acquires -- the other two are Instagram and WhatsApp.) But Facebook's vision for Oculus is much bigger than games:

After games, we're going to make Oculus a platform for many other experiences. 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 in your home.

The team at Oculus echoed Zuckerberg's sentiment in their own blog post:

At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform. But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step.

On a conference call discussing the deal, Oculus CEO Brendan Aribe said that as the company solved "a lot of the hard problems," around gaming and entertainment, the potential for a social experience through virtual reality became really obvious.

"Something fundamentally changes, and you start to realize how big this could be if you can see someone else, and you can actually look at them and your brain believes they're right in front of you, not through a screen ... You get the goosebumps. You see how big this could be, and how social it is, and the impact it could have on other industries," Aribe said.

 Shares of Facebook were slightly down by 0.88% in after-hours trading.

Antonio Rodriguez, an investor with Matrix Partners (and early investor in Oculus Rift), noted that Zuckerberg isn't alone in his thinking that the next major step in computing will use virtual reality. "We've had a short hop through augmented reality, with things like Google Glass," he said. "But a lot of non-gaming use cases are tethered to the smartphone."

Rodriguez added, "I would not be surprised if, in five years from now, instead of a monitor on that desk, you have a pair of Oculus Facebook googles."

Here's a video Fortune produced on the headset:

Posted in: Facebook, Oculus Rift, oculus VR

Facebook and Google in tech cold war

from cnn

By David Goldman  @DavidGoldmanCNN March 26, 2014: 9:53 PM ET


Facebook and Google are spending billions of dollars to ensure that they remain relevant in the rapidly changing technology landscape.

NEW YORK (CNNMoney)

Facebook and Google are locked in a high-stakes, multi-billion dollar battle to shape the future.

Both companies are spending like crazy on emerging technologies. Their aims: when their current businesses are disrupted -- and they will be -- they'll have a fallback plan.

"While Facebook is doing well now, it knows that its core business could degrade just as MySpace's did," said Carl Howe, analyst at Yankee Group.

That's why Facebook (FB, Fortune 500) has poured billions of dollars into a photo sharing network, facial recognition software, a chat app and now virtual reality company Oculus. Google (GOOG, Fortune 500), in turn, has invested billions indriverless cars, wearable gadgets, military robots and -- most recently through itspurchase of Nest -- connected home devices like smoke detectors and thermostats.

It's as if Facebook and Google are now combatants in Silicon Valley's version of a Cold War arms race.

"Facebook and Google are high technology titans engaged in a real world game of 'Monopoly' to grab the choicest technology properties in a bid to maintain and extend their dominance with each other as well and various other rivals," said Laura DiDio principal analyst at consultancy ITIC.

Related: Facebook to buy virtual reality company Oculus for $2 billion

These are long-term bets. For all their attempts to diversify, neither company's purchases have helped them expand beyond their core business models just yet. Both Google and Facebook generated about 90% of their revenue from advertising last year.

By buying Oculus, Facebook is betting that the next tech wave could be ruled by wearable devices. Google is making a similar bet with Glass and its Android Wear smartwatch platform.

 

Punch a shark with the Oculus Rift

The big question is whether Facebook bought the right wearable company.

Related: Smartphones are fading, wearables are next

Mark Zuckerberg said on a conference call with analysts Tuesday that he believes virtual reality has a chance to become the communications platform of the future.

But Oculus is unlike most wearable devices -- it is closed off from the rest of the world, taking over most of your senses, including your entire field of vision. That's great for gaming but it's not like we're going to be able to walk down the street with these things as we do today with smartphones and could even do one day with smartwatches and Google Glass.

"Oculus has a lot of cool, very immersive applications," said Ron Gruia, principal consultant at Frost & Sullivan. "At the same time, Oculus is very isolating, limiting its usefulness."

Even if it doesn't succeed, the bet seems to be worth it for Facebook. The company spent $2 billion on Oculus but only $400 million in cash -- loose change for a company with $11.5 billion in its corporate coffers.

But in the emerging Cold War between Facebook and Google, Facebook can't take quite as many risks. Google has $59 billion in cash and can lose a bet every once in a while, as it did with Motorola Mobility. (Google bought Motorola for $12.5 billion in 2011 but subsequently shed most of the assets, including the recent sale of Motorola's smartphone business to Lenovo for about $3 billion.)

Google's mission of cataloging information is also broader than Facebook's "connecting people" goal. So while Facebook can make wild bets like it is with Oculus, it has less wiggle room than Google in ensuring they pay off. Investors showed their disapproval on Wednesday as well. Shares of Facebook were down more than 3%.

But give both companies credit for knowing they can't rest on their laurels. Google CEO Larry Page and Facebook's Zuckerberg seem to recognize that it's not easy to stay on top of the tech world forever.

Numerous firms that were once industry titans fell to Earth after they failed to adapt to a new wave of technology. In fact, both companies literally have their headquarters in the graveyard of former tech darlings.

Facebook's Menlo Park offices are in the former home of Sun Microsystems, which Oracle(ORCL, Fortune 500) snapped up in 2010. And Google lives in the former headquarters of Silicon Graphics Inc. -- the once-mighty computing company that filed for bankruptcy in 2009. 

First Published: March 26, 2014: 12:52 PM ET

Big Bang breakthrough announced; gravitational waves detected

from cnn

By Elizabeth Landau, CNN

updated 10:37 AM EDT, Tue March 18, 2014 | Filed under: Innovations

Ripples in space-time revealed

STORY HIGHLIGHTS

• Gravitational waves were predicted by Albert Einstein
• New results from BICEP2 are 'smoking gun for inflation'
• During inflation, the universe expanded faster than the speed of light

(CNN) -- There's no way for us to know exactly what happened some 13.8 billion years ago, when our universe burst onto the scene. But scientists announced Monday a breakthrough in understanding how our world as we know it came to be.

If the discovery holds up to scrutiny, it's evidence of how the universe rapidly expanded less than a trillionth of a second after the Big Bang.

"It teaches us something crucial about how our universe began," said Sean Carroll, a physicist at California Institute of Technology, who was not involved in the study. "It's an amazing achievement that we humans, doing science systematically for just a few hundred years, can extend our understanding that far."

What's more, researchers discovered direct evidence for the first time of what Albert Einstein predicted in his general theory of relativity: Gravitational waves.

These are essentially ripples in space-time, which have been thought of as the "first tremors of the Big Bang," according to the Harvard-Smithsonian Center for Astrophysics.

A telescope at the South Pole called BICEP2 -- Background Imaging of Cosmic Extragalactic Polarization 2 -- was critical to the discovery. The telescope allowed scientists to analyze the polarization of light left over from the early universe, leading to Monday's landmark announcement.

The BICEP2 telescope looks at polarization of light from 380,000 years after the Big Bang.

How inflation works

Scientists use the word "inflation" to describe how the universe rapidly expanded after the Big Bang in a ripping-apart of space. The BICEP2 results are the "smoking gun for inflation," Marc Kamionkowski, professor of physics and astronomy, said at a news conference. Kamionkowski also was not involved in the project.

"Inflation is the theory about the 'bang' of Big Bang," said Chao-Lin Kuo, an assistant professor of physics at Stanford and SLAC National Accelerator Laboratory, and a co-leader of the BICEP2 collaboration, in a Stanford video. "It explains why we have all this stuff in the universe."

Imagine that you are making a raisin bun, said Stanford physicist Kent Irwin, who worked on sensors and readout systems used in the experiment. As the dough bakes and expands, the distance from any given raisin to another increases.

"Certainly everything in the universe that we see now, at one time before inflation, was smaller than an electron," Irwin said. "And then it expanded during inflation at faster than the speed of light."

You may have learned in physics class that light sets the universe's speed limit, but space-time is an exception; it can stretch faster than the speed of light, Irwin said.

Stanford University professor Andrei Linde, who helped develop the current inflation theory, said the new results are something he had hoped to see for 30 years.

"If this is true, this is a moment of understanding of nature of such a magnitude that it just overwhelms and let's just hope that it's not a trick," Linde said in a university video interview.

Another cool tidbit: Inflation can be used in theories that suggest the existence of multiple universes, Irwin said, although these results do not directly address such theories.

What are gravitational waves?

Scientists believe that in the fabric of space-time, there are tiny ripples called quantum fluctuations. If you could look at space-time on the smallest scale possible, you would, in theory, see them, even today. Unfortunately, no microscope is capable of seeing something that small.

Such fluctuations also existed at the beginning of the universe. Inflation blew them up much larger, launching gravitational waves that we now see imprinted on the cosmic microwave background. "These gravitational waves are an aftershock of the Big Bang," he said. The BICEP2 study is the first to image them directly.

"We have for the first time a detection for the mythical gravity wave signal that people have been searching for so hard, for so long," said Clem Pryke, associate professor at the University of Minnesota, at a press conference Monday.

Other experiments such as LIGO -- Caltech's Laser Interferometer Gravitational Wave Observatory -- are also looking for proof of gravitational waves, but in the context of energetic cosmic phenomena such as coalescing black holes.

The gravitational waves suggested by the BICEP2 results would have expanded across the entire universe at that time, Irwin said. The length of one of these waves -- the distance between peaks and troughs -- would have been billions of light years across.

Light from the early universe, called cosmic microwave background radiation, reveals these telltale signs of our universe's history. Last year, scientists from the European Space Agency's Planck space telescope released a detailed map of temperature variations in this light, which came from from about 380,000 years after the Big Bang.

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Twitter: @CNNLightYears

Better 'baby picture' of universe emerges

Instead of temperature, BICEP2 scientists were looking specifically at the polarization of the cosmic microwave background -- that is, the direction the electric field is pointing across the sky.

Researchers were looking for a specific type of polarization called "B-modes," which signify a curling pattern in the polarized orientations of light from the ancient universe, said Jamie Bock, co-leader of the BICEP2 collaboration and professor of physics at California Institute of Technology.

In theory, this swirling polarization pattern could only be created from gravitational waves. And that is what BICEP2 found.

"It's a very clean signature of those gravity waves," Irwin said.

Is it for real?

Because of how potentially important these results are, they must be viewed with skepticism, said David Spergel, professor of astrophysics at Princeton University. The measurement is a very difficult one to make and could easily be contaminated. There are, as it stands, some "oddities" in the results that could be concerning, he said.

"I am looking forward to seeing these results confirmed or refuted by other experiments in the next year or two," Spergel said.

The Planck space telescope collaboration is expected to release results on polarization of the cosmic microwave background as well, Irwin said. Other experiments are working toward similar goals, which could support or go against BICEP2.

Regardless, Monday's announcement is making big waves in the scientific community.

Follow Elizabeth Landau on Twitter at @lizlandau

Perspective: Microsoft risks security reputation ruin by retiring XP

from computerworld.com

Telling users they must upgrade, and to Windows 8.1, doesn't cut it

By Gregg Keizer

March 9, 2014 06:47 AM ET

542 Comments

inShare37

Computerworld 

- A decade ago, Microsoft kicked off SDL, or Security Development Lifecycle, a now-widely-adopted process designed to bake security into software, and began building what has become an unmatched reputation in how a vendor writes more secure code, keeps customers informed about security issues, and backs that up with regular patches.

But the Redmond, Wash. company, which just touted SDL's 10-year history with a flashy, anecdote-filled online presentation, seems willing to risk torching that hard-won reputation by pulling the plug on Windows XP.

Microsoft plans to ship the final public patches for Windows XP on April 8. After that, it will not deliver fixes for security vulnerabilities it and others find in the 13-year-old operating system.

The result, even Microsoft has said, could be devastating. Last October, the company said that after April 8, Windows XP would face a future where machines are infected at a rate 66% higher than before patches stopped.

Windows XP lives

• Perspective: Microsoft risks security reputation ruin by retiring XP
• Update: Microsoft reacts to XP upgrade critics with free file transfer tool
• No special treatment for China on XP, patches end April 8 in the PRC, too
• Microsoft misjudges customer loyalty with kill-XP plea
• Users mock Microsoft for asking their help on XP-to-Windows 8.1 upgrades
• Backlash slaps Microsoft's 'help-a-friend-dump-XP' plea
• Perspective: Microsoft asks for volunteers to join its kill-XP army
• Users postpone ditch-XP decision as Windows 8 runs to stay in place
• Microsoft retains weapon to silently scrub XP
• Microsoft will furnish malware assassin to XP users until mid-2015

More on Windows 

"After April [2014], when we release monthly security updates for supported versions of Windows, attackers will try and reverse engineer them to identify any vulnerabilities that also exist in Windows XP," said Tim Rains, director of Microsoft's Trustworthy Computing group. "If they succeed, attackers will have the capability to develop exploit code to take advantage of them."

Microsoft has justified its stoppage of Windows XP patches by reminding everyone that it has supported the OS longer than any others, which is true: Its normal practice is to patch an operating system for 10 years. And it has argued that Windows XP is old, outdated software that is less secure than its newer operating systems: Windows 7, Windows 8 and Windows 8.1.

Again, true.

The problem that Microsoft has only occasionally touched on is that Windows XP powers a massive number of personal computers around the world. According to Internet measurement company Net Applications, 29.5% of the globe's PCs ran XP in February. Using estimates of the number of Windows PCs now in operation, that "user share" translates into approximately 488 million systems.

Four hundred and eighty-eight million.

If every PC sold in the next 12 months was one destined to replace an existing Windows XP system, it would take more than a year and a half -- about 20 months -- to eradicate XP. Windows XP isn't going anywhere.

Even if one discounts the 70% of the approximately 300 million XP machines in China that are not regularly updated with existing patches -- the 70% statistic comes from Microsoft -- that still leaves 278 million machines.

Microsoft has never faced this situation before, with a soon-to-be-retired OS running a third of all the Windows PCs worldwide. So on one hand it's not surprising that it has stuck to its guns, and is pushing XP into the sunset and forgetting it.

But by doing that, it could hurt itself as much as the customers who end up with an infected XP system.

There's the real possibility that large-scale infections of Windows XP will paint the Windows brand as insecure, fulfilling the implicit prophecy the company made late last year. To most people, Windows is Windows is Windows, with no distinction between XP and the newest, locked-down 8.1. And for those people, Windows is Microsoft because it's the best known of the company's software.

So if post-April headlines appear that shout, "Windows under massive attack," Microsoft's reassurances that the bug can be exploited only on XP, that newer editions of Windows are safe to use, will be lost amidst the noise.

Outside its own software, Microsoft has other reasons for worry. As the company has often said, it's not just Windows that it must keep secure, it's the entire Windows ecosystem, the gamut of software that runs on the platform. A bug in a third-party program, such as Adobe's like-a-sieve Flash Player, which has had to be patched 18 times in the face of ongoing attacks since 2010, reflects poorly not just on Adobe but also on Microsoft. That's because Windows powers 90% of the world's PCs.

That's one reason why Microsoft has reached out to third-party developers -- Adobe being just one -- to help them craft their own SDL-like processes, a fact last week's retrospective trumpeted when it said its SDL guidance had been downloaded more than 1 million times since 2008.

Co-founder and former CEO Bill Gates made the connection in an all-company email he sent in January 2002, the call to action memorandum that ultimately led to SDL. "Our new design approaches need to dramatically reduce the number of such issues that come up in the software that Microsoft, its partners and its customers create," Gates said. "Trustworthiness is a much broader concept than security, and winning our customers' trust involves more than just fixing bugs and achieving 'five-nines' availability. It's a fundamental challenge that spans the entire computing ecosystem, from individual chips all the way to global Internet services (emphasis added)."

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Samsung introduces free streaming radio service

from chron.com

By BREE FOWLER, AP Technology Writer | March 7, 2014 | Updated: March 7, 2014 2:53pm

Photo By Samsung/AP 
This undated image provided by Samsung shows the logo for the new free music service for its phones that the company unveiled on Friday, March 7, 2014. Samsung touts the service as a significant improvement from the apps already on the market.

NEW YORK (AP) — Samsung on Friday unveiled a new free music service for its phones that it touts as a significant improvement from the apps already on the market.

The South Korean gadget maker's Milk Music service, which launched in the U.S. on Friday, includes over 200 stations and 13 million songs. It's designed to be extremely fast, easy to use and highly customizable.

But the new service enters an already crowded space. There are numerous streaming music services, including Pandora, Spotify and Apple Inc.'s iTunes Radio.

"We feel that while the music space is very competitive there is room for improvement," said Daren Tsui, vice president of music at Samsung Media Solutions.

Samsung's app features a large wheel reminiscent of an old-fashioned radio tuner. Users can spin through various genres of music to find something they like. Favorite stations can be added to a "My Stations" section, while individual songs can be tagged as favorites or put on a list never to be played.

Milk is powered by Slacker, which operates its own streaming music service. But unlike Slacker, Milk is ad-free at no cost. While Slacker does offer a basic service for free, it charges users $4 a month to remove advertising.

U.S. users can now download the Milk app from Google Play. It works on most of Samsung's Galaxy line of phones, but isn't compatible with devices made by other companies.