Why Is Google Increasing Its Focus on Virtual Reality? Google Competes Against Oculus

By J. Navarra

Jan 15, 2016 10:10 PM EST

Google has been very open about progressing towards virtual reality especially with the recent update announced that emphasizes spatial audio for its Google Cardboard. So why the sudden surge in focus on virtual reality?

Reports have surfaced that Google's subsidiary, Alphabet, is forming a team dedicated to virtual reality and an executive has been named to lead the division.

Currently, Google's Cardboard is a virtual reality device targeting smart phone users and is available from $4 up to $30. Compare it with Facebook's Oculus which is set at $599 and is a virtual reality headset for the PC.

Though the two companies do not appear to be directly competing with each other, it is an indication that they are trying to take the virtual reality market.

Google's focus however is to enhance its video platform in Youtube and grab a stake in the virtual reality advertising space - which Facebook's Oculus is already doing.

We all know that Virtual Reality is the next big thing and Google has been updating the Cardboard with apps that developers can bank on. The next big move that companies can make is to utilize virtual reality space for advertising opportunities. This is a big chance for businesses to claim a space because virtual reality can create an immersive experience for the user. What better way to show their products and services?

Estimates show that search ads account for 70% of Google's valuation. This is the main reason why Google wants to maintain its leadership in the search ads business.

Google has strategically moved in the virtual reality market by building affordable VR devices that can be used by smartphone users anywhere. Combine that with ads, this should be advantageous for the company. YouTube accounts for less than 5% of the company's valuation, estimates indicate for the present. However, with the rise of live video streaming subscriptions, it can eventually become a key to Google's virtual reality move, as reported online.