Facebook's price tag for Oculus actually $3 billion, Zuckerberg reveals in court testimony

Facebook CEO Zuckerberg arrives in Dallas court
Facebook CEO Zuckerberg arrives in Dallas court

Facebook CEO Mark Zuckerberg revealed in court testimony Tuesday that the company actually paid $3 billion to buy Oculus.

His testimony came in a Dallas courtroom, when game maker ZeniMax alleges that Oculus, bought by Facebook in 2014, stole the company's intellectual property.

ZeniMax's attorney pressed Zuckerberg on the total Facebook paid for the company. Zuckerberg revealed that beyond the $2 billion price tag, that was widely reported, Facebook paid an additional $700 million to retain employees and another $300 million earnout for hitting key milestones.

Source: CNBC

Nearly three years after the Oculus acquisition Zuckerberg defended against allegations that Oculus stole ZeniMax's intellectual property, also explaining his interest in VR and how it fits into his vision for Oculus.

After being introduced to the technology by famed investor Marc Andreessen, meeting with Oculus made Zuckerberg realize that the shift from television to virtual reality was closer than he thought, prompting him to invest in virtual reality.

Through this intense cross-examination, Zuckerberg revealed more insight into his interest in VR, an investment which many have criticized as too far-flung from Facebook's core mission.

"We want to give people more tools to share their experience — get closer to this kind of perfect representation so you can capture a moment you had," said Zuckerberg.

The case centers around John Carmack, Oculus chief technology officer and founder of a company owned by ZeniMax. Andreessen wrote an email to Zuckerberg in 2013, saying "The key seems to be that ... they have added John Carmack as the CTO ... he is completely obsessed with it and I want to give him all my money on the spot," ZeniMax's lawyer Tony Sammi said.

"We decided that by far this was the best team out there and we wanted to move forward," Zuckerberg said.

ZeniMax alleges that the Oculus Rift was "primitive" until Carmack added numerous improvements to the headset prototype, alongside ZeniMax employees.

"Carmack made breakthrough modifications to the Rift prototype based upon years of prior research at ZeniMax," the legal complaint says.

On the stand, Zuckerberg said, "I am here because I believe [these accusations] are false and I think it's important to testify to that."

Sammi asked Zuckerberg to respond to claims that Carmack had code and more than 10,000 documents from before he left ZeniMax.

"No, I wasn't aware of that," Zuckerberg said. "It's something we should investigate."

Zuckerberg also said that Carmack has not been disciplined in relation to the case because "it would be wrong to discipline employees for claims that we believe are wrong."

Zuckerberg told the court he was unaware of whether Oculus founder Palmer Luckey signed an nondisclosure agreement with ZeniMax, nor did he know of one of Oculus' co-founders Nate Miller getting information from ZeniMax.

When asked why the lawsuit between ZeniMax and Oculus wasn't brought to his attention sooner, Zuckerberg said that "it is pretty common when you announce a big deal, all kinds of people come out of the woodwork and make claims."

"I had my legal team look into all claims that would come up and they're going to bring me things they think I need to see," Zuckerberg said.

The lawsuit alleges that Luckey formed Oculus just three days after a gaming convention where ZeniMax displayed the technology behind the Rift headset.

Oculus told CNBC it's eager to respond in court to the suit.

"Oculus and its founders have invested a wealth of time and money in VR because we believe it can fundamentally transform the way people interact and communicate," an Oculus spokesperson told CNBC before Tuesday's proceedings. "We're disappointed that another company is using wasteful litigation to attempt to take credit for technology that it did not have the vision, expertise, or patience to build."

But Sammi asked Zuckerberg "If you steal my bike, paint it, put a bell on it, does that make it your bike?"

"No," Zuckerberg replied.

— Reporting by Lucy Scott and CNBC's Mike Newberg. Additional reporting by CNBC's Julia Boorstin

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