Facebook opens a hardware lab, signaling broader ambitions

Model maker Spencer Burns looks over a globe under construction inside a vertical milling machine during a tour of the hardware R&D lab at Facebook headquarters in Menlo Park, Calif.
(Eric Risberg / Associated Press)

Facebook Inc. built its fortune on the Internet, that nonphysical space where people share updates and digital videos with one another. But deep inside its Menlo Park, Calif., headquarters, engineers have stocked a new lab with computerized lathes, industrial mills and tools for making physical goods.

It’s not a factory for mass-producing smartphones or other consumer products. Rather, it’s where engineers will be working on some of the high-tech gadgetry needed for the company’s long-term plans to connect people through smart devices, virtual-reality headsets and high-flying drones that deliver Internet signals via laser to remote parts of the world.

And like Google’s celebrated X lab, where the Internet search giant pursues “moonshot” projects such as self-driving cars, Facebook’s new research facility demonstrates that in Silicon Valley, leading tech companies are rarely content to keep doing the same thing.


“When you think about connecting the world, you have to build different types of hardware to help people connect,” said Jay Parikh, Facebook’s head of engineering and infrastructure.

To get virtual reality right, he added, Facebook needs to refine hardware such as lenses and processors.

The lab will be a space for engineers to design energy-efficient servers for Facebook data centers, test new laser mounts and drone propellers and perfect a prototype 360-degree video camera that Facebook unveiled in April.

Facebook announced the lab’s opening Wednesday. It wouldn’t say how much it spent to build the facility.

The lab is dubbed Area 404, a joke playing off the “error 404” message Internet users see when they try to visit a Web page that can’t be found. Facebook says its engineers had long talked about wanting such a workspace.

Facebook became a Silicon Valley powerhouse and Wall Street darling because its vast online network is so attractive to digital advertisers. The company sold more than $6 billion worth of ads in the April-through-June quarter, reaping more than $2 billion in profit.


That offers plenty of leeway to invest in new ventures. Two years ago, the company spent $2 billion to buy Oculus VR, a start-up that makes high-end gear for virtual reality. Facebook Chief Executive Mark Zuckerberg has predicted that virtual reality will become a leading platform for communication, entertainment, education and business. In recent speeches, he outlined a 10-year vision for Facebook that includes services based on virtual reality, artificial intelligence and Internet access for the world’s most underdeveloped regions.

The Oculus operation has its own lab in Seattle, and Facebook’s drone team is based in Somerset, England. They aren’t relocating, but Parikh said engineers from both groups will also use the new facility.

Zuckerberg has hinted at other aspirations, too. In the spring, he announced the formation of a mysterious research-and-development group known as Building 8. It’s led by prominent engineer Regina Dugan, a former director of the Pentagon’s Defense Advanced Research Projects Agency, or DARPA, the agency that created the Internet in the late 1960s.

Before joining Facebook, Dugan ran a Google team that specialized in “rapid innovation” of new tech gadgets. Her projects included a location-tracking smartphone camera for creating 3-D virtual worlds, a technology that Lenovo will include in the Phab 2 Pro smartphone due out this month.

Dugan’s group will use the Area 404 lab, but Facebook wouldn’t talk about specific projects she will undertake.

Analysts say it’s too early to know if these ideas will boost Facebook’s bottom line. But rivals including Google, Amazon and Microsoft have similar ambitions, some involving drones, tablets or other hardware. Facebook says it spent $4.8 billion on research and development in 2015, nearly double its budget from the previous year.


“When you’re big enough, you need to think bigger picture and longer term,” said Bob O’Donnell, chief analyst at Technalysis Research.

Facebook could wait for others to develop new gadgets, he said, but the company can learn by designing hardware on its own and seeing how its software works with it. He said Facebook could even license its hardware ideas for others to manufacture.

Aside from Oculus, most of Facebook’s hardware isn’t aimed at the consumer market. Several years ago, the tech industry was abuzz with rumors that Zuckerberg wanted to build a Facebook smartphone. That never happened, although Facebook created special software for an HTC phone that didn’t sell well.

Instead, Facebook has led an industry effort to develop more energy-efficient computer centers by sharing server designs with other companies. Similarly, it says, it developed the 360-degree video camera to show other inventors what’s possible in new camera designs. Those designs could, in turn, produce more video content for the social network to share.

Facebook executives say their solar-powered drones are also meant as prototypes, in the hope that telecommunications companies will use their designs. Although Zuckerberg says Internet access can spur economic development in poor nations, Facebook also stands to benefit if more people get online.



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