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Facebook’s OC Focus

Orange County gave Silicon Valley and the rest of the world plenty to talk about in a 24-hour burst last week.

Google Inc. added Foothill Ranch-based Oakley Inc. as a collaborator on its much-scrutinized Google Glass project.

Facebook Inc. ponied up $2 billion in cash and stock for Irvine-based startup Oculus VR Inc.

The separate deals tying two of the most prominent names of the digital age to OC-based companies sparked a wave of conversations about technology’s convergence as a fact of daily life.

They also opened a round of speculation on what’s in store for OC, where a mix of software developers, video game makers, action sports brands, and ophthalmological device companies could amount to a potent brew when it comes to the development of virtual reality over the long haul.

The near-term has Facebook saying it plans to keep its newly acquired business in Irvine (see sidebar, this page).

Google, meanwhile, looks to be sorely in need of the sort of hip brand awareness and design sensibility that’s part and parcel of Oakley.

Differences

The long-term outlook remains to be seen and likely will be influenced by significant differences in the two deals:

• Facebook bought while Google got into a sort of hookup.

• Oculus is an 18-month-old whirlwind, whereas Oakley is a long-established brand with more than $1 billion in annual sales as part of Milan, Italy-based powerhouse Luxottica SPA.

• Oakley’s DNA tracks back to the singular driving force of founder Jim Jannard, who remains an inspiration behind the brand seven years after he sold it to Luxottica. Oculus is the brainchild of 21-year-old founder Palmer Luckey but also appears to reflect the influence of a cast of professionals and venture capitalists putting lots of fingerprints on the young company.

There are similarities, including the imperfect early versions and limited sales of the two products at the heart of last week’s deals.

Oculus has sold about 75,000 of its virtual headsets to date, primarily to gaming developers and other content creators who paid about $300 apiece. About 24,000 people own Google Glass, which goes for about $1,500 and is available only after an application process that makes owners part of a market test.

What’s been missing in the Google Glass plan is a retail distribution strategy, something Oakley and its parent bring firepower to in the recently announced collaboration. Luxottica owns the Sun Glass Hut retail chain and the LensCrafters and Pearl Vision optometry chains. Those add up to about 7,000 outlets, and Oakley has locations of its own.

Oculus, meanwhile, is nearly a self-contained operation—with the exception of its sales to developers. It keeps a low-profile office on MacArthur Boulevard in Irvine where it landed shortly after it was established in 2012 by Long Beach native Luckey, a former engineer in the Mixed Reality lab of the University of Southern California’s Institute for Creative Technologies.

Key Oculus Hires

Chief Executive Brendan Iribe was hired to lead Oculus in August 2012, just before it raised $2.4 million through online funder Kickstarter.

He appears to be the key to how Oculus came to set up shop in OC. The game developer-by-trade served as the chief product officer at Aliso Viejo-based cloud streaming provider Gaikai Inc. immediately prior to joining Oculus. Gaikai had just been acquired by Sony Computer Entertainment Inc. for $380 million.

Iribe’s resume covers several locales over about two decades. He cofounded Maryland-based Scaleform Corp. in 1999 with Michael Antonov, Oculus’ current chief software architect. Scaleform, which licensed its middleware technology in some 800 video games, was acquired in 2011 by San Rafael-based Autodesk Inc. for $36 million.

Iribe also serves as managing partner of BIG Ventures, a seed-stage investment group that focuses on video game and interactive entertainment technology. The firm has taken a stake in Iribe’s prior companies, as well as Los Angeles-based gaming tablet maker WikiPad Inc., according to his LinkedIn bio.

Luckey followed his hire of Iribe with the addition of noted game developer John Carmack, whose hits include Doom and Quake, to create the prototype Oculus Rift. Carmack left id Software, the Texas gaming company he founded, in late 2013 to become chief technology officer at Oculus.

Oculus has overcome several setbacks in its short history, including losing one of its founding hires.

Computer graphics engineer Andrew Reisse was killed in a hit-and-run accident last June in Santa Ana. The company fittingly commemorated his contributions and life through a memorial Oculus Rift users encountered as part of the company’s demo at the E3 video gaming conference in Los Angeles last year.

Early reports on the deal with Facebook, which called for about $400 million in cash and $1.6 billion in stock, estimate that venture capitalists owned about half of Oculus, with the rest in the hands of Luckey and his small band of founding hires.

OC Prototype

Ryan Steelberg was about a week ahead of the headlines when he told the crowd at the Business Journal’s recent Excellence in Entrepreneurship awards (related coverage starts on page 1) about the day some investors from the “valley” came down to Orange County to visit him and his brother, Chad, in the mid-1990s.

The “valley” referred to Silicon Valley, and the investors came from Sand Hill Road in Menlo Park—the epicenter of venture capital for technology. They were interested in AdForce Inc., the company the Steelberg brothers—a couple of 20-somethings at the time—started a couple of years earlier.

The visit was a step toward an eventual $500 million sale of AdForce, the first of several companies founded by the Steelberg brothers, who sold dMarc Broadcasting Inc. to Google in 2006 in a deal that brought them an estimated $200 million, and who now have Brand Affinity Technologies Inc. in Irvine.

The Steelbergs are living proof that Silicon Valley’s lighting can strike more than once in OC.

The latest examples showed it can strike twice within 24 hours.

Business Journal reporter Kari Hamanaka contributed to this report.

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