Facebook Is World's Largest Virtual Reality Company

Facebook is the world's most successful virtual reality company. In a sense, Facebook's upcoming IPO will be a virtual IPO, as investors pass down a verdict on the value of that future.

Even if the stock offering takes place on traditional financial markets, all of the proceeds will be literally convertible into Facebook credits, among the world's most widely recognized virtual currencies. At a conversion rate of 10 Facebook credits per $1, Facebook could soon be worth one trillion credits.

Facebook's coming IPO suggests three topics related to social networking and virtual reality:
  1. How social networks function as early virtual reality 
  2. What the future of social networks may hold
  3. How Facebook has a unique opportunity to bring that future about
Social Networks as Virtual Reality

Non-virtual social networks take place in real-time and face-to-face. Modern friends, like hunter gatherers of long ago, gather around, dine, talk, dance. But that's only a part of our social lives. Society began to move away from traditional socializing with the invention of spoken language, which allowed time-shifting: messages could pass from one person to another via a messenger, at a temporal delay.

Even animals like ants and bees are capable of time-shifting, passing messages using coded dances and movements. Messages may serve clear purposes: to warn of danger, to announce the location of food, to share kinship.

For humans, drawing, painting and later writing enabled longer durations of time-shifting with more complex messages. A viewer or reader of such a message conjured up an increasingly rich virtual world, envisioning and even inhabiting a reconstruction of another place and time, from another person's point of view.

Social networks like Facebook add a new level of realism and bring back the option of immediacy. Social networks enable near instant communication across space and time. With text, images, music, video and a timeline, Facebook creates a virtual social reality that builds on what humans have been doing for millennia.

The Future of Social Networks

Video games are even more immersive, as well as a bigger business with $65 billion in global sales. To combine social networking with video games, we need some virtual reality devices.

They already exist. There are more than 4.6 billion mobile phones in the world. Most now contain cameras, and many of those can record video. Think about it. Around the world, millions of people are all carrying GPS systems with video cameras. We're not far away from being able to record every moment of our lives in high definition video, from multiple points of view, with our positions tracked on a global map.

With advanced image processing, all of that video could be converted into physical models of people, objects and movements.

With sound delivered via earphones or implants, and vision delivered through glasses or neural interfaces, the virtual world could reach us in stunning detail that goes far beyond our current smart phones and tablets.

And there's no reason why we would need to limit ourselves to virtual worlds based on reality. Virtual worlds that build on our current generations of video games could meld the social and the virtual.

Facebook Has a Unique Opportunity

With the largest user base of any social network today, Facebook has the opportunity to improve the interactions it enables between users. Video chat, video streams, GPS and timelines are primitive today, like cave drawings and the dances of bees upon return to their hives.

As computing power and bandwidth increase, expect social networks to grow in realism. As addictive as Facebook already is -- the site that millions of people literally check first thing in the morning when they awake, and last thing at night before they go to sleep, exactly as Mark Zuckerberg imagined -- it has the potential to grow vastly more so.

Under Zuckerberg's leadership, Facebook has already demonstrated a knack for getting the human element right in a way that previous social networks failed to do. Despite all of the criticisms about privacy policies and occasional missteps, Facebook has succeeded remarkably in enabling rich interaction, making people feel connected to each other.

Will Facebook continue to lead the way? Or will a new startup combine the immersive reality of video games with the human need to socialize and render Facebook obsolete?

Facebook is a very early stage virtual reality company. The $100 billion valuation depends in part on expectations of Facebook's virtual future.

Links:
Is Facebook Revolutionary?
Facebook IPO is in virtual currency
The Economist: Facebook vs other businesses 

3 comments:

  1. Nice Article Jonathan. You've a great point, there are plenty of innovations happening to combine the Video chat, video streams, messaging that is going to keep us all together, interacting with each other in many ways possible than imagined just a few years ago.
    Innovations should not stop with Facebook or not the responsibility of Facebook. Larger question is how much open Facebook is willing to be? How are they going to harness the power of their users to enable other companies/organizations to innovate the data already available in Facebook's servers? After all, the world has only finite number of internet users and most are already in Facebook. Whether Facebook going to close access to this vast database of users and content? are they going to offer some form of free access ? Or are they going to charge for it, like twitter Firehose? (Hope not). Related note: Facebook's IPO is going to be an inflection point for the whole tech industry, let us hope it is sustainable and good for all of us in the long run.

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  2. Glad you enjoyed it. Agree that innovation has to come from more than one company, and there are some unique challenges to being a public company that may make it harder to resist monetizing everything to the detriment of the user experience. I expect to see some new charges, especially with their ad revenue lagging given how much time people spend on the site, and with mobile becoming a bigger share of usage.

    For tech as a whole, we've seen a bunch of IPOs in the past year. Facebook's will be one to watch for sure. Amazing that the site has become a bellwether for the entire technology sector.

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