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Facebook Opens Hardware Lab, in Sign of Broader Ambitions

Facebook CEO Mark Zuckerberg holds a propeller pod of the solar-powered Aquila drone on stage during a keynote at the Facebook F8 conference in San Francisco, California, April 12, 2016.

Facebook built its fortune on the internet, that non-physical space where people share updates and digital videos with friends. But deep inside its Silicon Valley headquarters, Facebook 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 billionaire CEO Mark Zuckerberg's long-term plans to connect people through smart gadgets, 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 like self-driving cars, Facebook's new research facility demonstrates that in Silicon Valley, leading tech companies are rarely content to just keep making 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 like lenses and processors.

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

Facebook invited journalists this week to tour the shiny new research facility. Facebook announced its opening Wednesday. The company wouldn't say how much it spent to build the lab.

The lab is dubbed Area 404, an inside joke playing off the "error 404'' message that 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, but it couldn't be found either, because it didn't exist until now.

Facebook isn't widely known for making computer hardware or other physical products. It became a Silicon Valley powerhouse and Wall Street darling because its vast online network is a mecca for digital advertisers. Facebook sold more than $6 billion worth of ads in the April-June quarter, reaping more than $2 billion in profit.

That gives the company plenty of leeway to invest in new ventures. Two years ago, Facebook spent $2 billion to buy Oculus VR, a startup that makes high-end gear for virtual reality. Zuckerberg has predicted that virtual reality will be a leading platform for communication, entertainment, education and business in the future. In recent speeches, he has outlined a 10-year vision for Facebook that includes services based on virtual reality, artificial intelligence and internet access for the world's most under-developed regions.

The Oculus operation has its own lab in Seattle, while 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. This 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, 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. Projects include a location-tracking smartphone camera for creating 3-D virtual worlds, a technology that Lenovo will include in the Phab2 Pro out this month.

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

Analysts say it's too early to know if these ideas are "vanity projects'' or if they will boost Facebook's bottom line. But rival software giants like Google, Amazon and Microsoft have ambitions of similar scope, some involving drones, tablets or other hardware.

"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 very well.

Instead, Facebook has led an industry effort to develop more energy-efficient computer centers by sharing server designs with other companies. Similarly, Facebook says it developed the 360-degree video camera to show other inventors what's possible in new camera designs, which, in turn, could 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. While Zuckerberg says internet access can spur economic development in poor nations, Facebook may also benefit if more people get online.