Facebook Inc (FB - Free Report) has acquired a Denmark based start up, The Eye Tribe, for an undisclosed amount.
The Eye Tribe, founded in 2011 in Copenhagen, is engaged in developing eye tracking technology. Per media reports, Eye Tribe’s $99 eye tracking developer kit has the ability to “bring gaze-based interfaces to smartphones and potentially virtual reality headsets.”
Eye Tribe will work in tandem with its VR division, Oculus. Per Bloomberg, “Facebook is especially interested in eye tracking because the company wants to take the lead in social interactions in VR. The ability to follow eye movement makes it easier to understand people’s expressions and let them communicate effectively with each other in a virtual world.”
With Oculus, Facebook is trying to boost its ambitious AR/VR efforts. Oculus was founded by Palmer Luckey and Brendan Iribe in 2012. It was acquired by Facebook for $2 billion in 2014. Oculus has long been dubbed as a big growth driver along with Facebook’s other subsidiaries like Messenger, Instagram and WhatsApp.
Rift VR headset was the first launched product after Facebook acquired Oculus. Despite being a hotly anticipated product, Rift’s reviews were polarizing. Plus, Facebook also stumbled with the initial shipments. Oculus Motion controllers also arrived this December after much delay.
Despite odds, Facebook remains focused on exploring newer business opportunities, which include the development of AR/VR technology as high revenue growth rates start to stabilize. Advertising is the mainstay of the social media services revenues. Recently, Facebook split Oculus into two separate units. While one division will focus on developing VR for mobile, the other one will focus on VR for PCs.
In October, at Oculus’ developer conference, Facebook seemed enthusiastic to bring VR technology to the mainstream. The most surprising announcement made at the conference held at San Jose Convention Center, CA, was Santa Cruz, a cheaper standalone VR headset with inside-out tracking. Facebook said that the product was still in a prototype stage. Moreover, Facebook announced another $250 million investment to develop VR content ecosystem.
A few days back, Brendan Iribe, Ex CEO of Oculus had said “VR went from science fiction to the most exciting new consumer technology around” and we couldn’t agree more. Though in its formative years, AR/VR technology along with AI are considered the next step in technological innovation. Consequently, all the tech giants right from Facebook to Amazon.com, Inc (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) are pumping huge resources to develop the new technology. Reportedly, Alphabet recently acquired another eye tracking technology specialist, Eyefluence.
According to a recent IDC report, global revenues of the AR/VR market are expected to grow at a CAGR of 181.3% from $5.2 billion in 2016 to over $162 billion in 2020.
At present Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Year to date, Facebook shares have generated a return of 11.71% compared with the Zacks Internet Services’ industry’s return of 3.11%.
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