If ever there are people out there wondering how Facebook Inc (NASDAQ:FB) would cash in on its billion-dollar investment in Oculus VR, Gene Munster says they only need to examine the technology’s potential for live events.
As such, virtual reality will eventually become a driver for the stock price of the world’s largest social network, the analyst says.
Facebook Inc (NASDAQ:FB) can monetize technology developed by their Oculus VR business in two ways, Piper Jaffray’s Munster tells CNBC.
“It’s still a few years away but there [are] two ways that they can [monetize Oculus]. The initial way is that the real killer application for this whole virtual reality [technology] is live events, live sports,” Munster tells CNBC in the interview.
According to him, Facebook Inc (NASDAQ:FB) can work with companies like NextVR, for example, and do sporting events like NASCAR in real-time. The company can expand their selection by eventually doing NBA and NFL games for Oculus.
The social network bought the virtual reality company last year for nearly $2 billion. While that may seem steep a price to pay for a nascent industry, Munster’s remarks seem to imply that it will be worth it for the social networking giant.
“The second piece which is even the bigger opportunity is called augmented reality. It’s even further down the road. But that’s going to essentially replace computing as we know it. […] It’s not in current Facebook valuation but eventually it’s going to be a driver for the stock,” Munster tells CNBC.
Facebook Inc (NASDAQ:FB) will eventually build a platform around Oculus, Munster adds, which is akin to the company’s strategy with Messenger as revealed during the recent F8 developers conference. The company is allowing developers to build upon Messenger as a platform and therefore creating more revenue from that technology.
Munster says that in the future, the firm will also open Oculus as a platform, allow developers to make applications around this platform, bring new experiences to people which were never before possible, and rake in the rewards from this technology.
Philippe Laffont’s Coatue Management owned about 7.18 million shares of Facebook Inc (NASDAQ:FB) by the end of the last quarter of 2014.
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