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Instagram. WhatsApp. And now, Oculus. The senior executives of the companies that Facebook has acquired continue to go out.
Oculus CEO Brendan Iribe, co-founder of the virtual reality startup that Facebook bought for more than $ 2 billion in 2014, became Monday the last leading executive to leave the largest social network in the world. This list reads as one who is that of the high tech industry talent that does not seem to want to stay in the Facebook CEO team, Mark Zuckerberg. This list includes Instagram co-founders Kevin Systrom and Mike Krieger, Brian Acton and What K of WhatApp, and Oculus co-founder Palmer Luckey.
Departures could have long-term consequences for Facebook. By subjecting all acquired companies to tighter control by Zuckerberg, the company could tell other start-up founders that selling to Facebook shows that "even though the independence mechanism is attractive, it is temporary, "writes Bloomberg News about the latest release.
For technology giants, the ability to continue to grow depends on their ability to attract entrepreneurs who believe in their mission and culture. If the founders begin to think that Facebook is not a welcoming place for startups, it could hinder Facebook's ability to compete with competitors such as Google and Amazon.
Some comments from the leaders support this scenario. "I've sold the privacy of my users at a cheaper price," Acton told Forbes last month, citing potential plans for Facebook to include ads on the messaging app. "I made a choice and a compromise, and I live with it every day." And at last week's Wired25 summit, Systrom alluded to tensions between him and Zuckerberg when he said: "Nobody leaves his job because everything is great."
In the case of Oculus, Iribe is not the first high-level exit of this team. Luckey, co-founder of Oculus and VR, Luckey left Facebook a year and a half ago, after appearing to help fund some political activity on Reddit. Luckey and Iribe first raised $ 2.4 million on Kickstarter to develop Rift's original VR headset and then sold their startup to Facebook.
"Oculus has the opportunity to create the most social platform ever created and change the way we work, play and communicate," said Zuckerberg in 2014, when he announced the purchase of # 39; Oculus.
On Monday, a Facebook spokesman downplayed Iribe's departure, saying in a statement that "there is no change for the future of Oculus".
Iribe held the position of CEO of Oculus until 2016, when he left his position to lead a group within the company focused on virtual reality and personal computers. Facebook then hired Hugo Barra of Chinese smartphone maker Xiaomi to lead the virtual reality efforts of the social media company. Facebook's Andrew Bosworth is currently overseeing all of the company's augmented reality and virtual reality work.
"Every element of VR and AR needs to be improved, especially the basic hardware and technology, and Oculus has the best team in the world to do it," Iribe wrote in a Facebook message announcing his departure. "Although we are still far from delivering the magical smart glasses we all dream of, they are now almost within our reach."
L & # 39; gold standard
The Zuckerberg acquisition strategy seemed to be the gold standard for buyouts in Silicon Valley. This was a model developed by Google when it acquired YouTube in 2006. The acquired companies were treated as virtually separate companies and allowed to exercise leadership, branding and distinct corporate priorities. those of their parent company.
The strategy avoided the conventional wisdom that a tech giant was buying a small business and integrating it into its broader culture. Hewlett-Packard effectively merged with Compaq after its $ 25 billion acquisition in 2002. When independent headphone manufacturer Beats bought the MOG streaming service in 2012, it was eventually renamed Beats Music before its acquisition by Apple in 2014 .
Giving acquired societies a sense of autonomy was meant to give them the opportunity to grow. Shortly after their acquisitions in 2014, WhatsApp and Oculus, for example, were asked to stay as close as possible to the breakeven point, rather than seeking to generate profits.
This helped Zuckerberg keep the CEOs acquired longer than the remaining two years, usually as a result of financial incentives.
"At some point, the departure can take place for all kinds of reasons and if they are simply frustrated by the company's policy in general, it could happen anywhere," he said. Brian Wieser, Analyst at Pivotal Research Group.
What has changed in the case of Facebook, said these leaders, is that Zuckerberg is taking more control. He pushed Instagram to include more ads, according to Bloomberg. Similarly, he called on WhatsApp to relax the privacy standards to allow more ad tracking technologies, which could eventually help the division to generate revenue.
The departure of the co-founders of Instagram represents a much bigger loss for Facebook compared to Oculus, because of the advertising revenue generated by the photo-sharing app, reports analyst Wedbush Securities, Michael Pachter.
"Oculus is something that could be huge in ten years, but it's not huge in the next quarter," said Pachter.
For Facebook, the departures were added to a list of controversies that have made this year one of the most tumultuous in the history of the company. These include the Cambridge Analytica scandal, in which a UK-based policy consultancy collected personal information from 87 million Facebook users without their permission. And earlier this month, Facebook told 29 million people that their data had been stolen as part of a massive security breach.
"The management of the company is causing more and more concern," said Wieser.
First published Oct. 22 at 10:59 Pacific Time.
Updated, 11:43 PT: Includes more background on Oculus.
Updated, 11:56 PT: Includes comments from the Facebook spokesperson.
Updated, 14:41 PT: Adds details throughout and comments from the analyst.
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