May 31, 2012

Facebook Signals Phone Future

Are Facebook's moves toward producing a smart phone smart or phony? Larry Greenemeier reports

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Facebook is sending signals that it’s planning to get into the smart phone business. Of course, stories about a Facebook phone have been circulating since 2010. But this time around the story is a bit more compelling.

For starters, The New York Times recently reported that the social network has hired at least six former Apple engineers. The Times also cites anonymous sources saying Facebook hopes to release its own smart phone by 2013.

Also new: Facebook is now a public company. A public company whose stock price has dropped steadily since its IPO. Investors seem worried that Facebook gets most of its revenue through advertising, and that big advertisers don't "like" the site. General Motors announced even before the IPO that it would stop advertising on Facebook. The company said its ads there weren't influencing car buyers.

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Still, smart phones are a tough market, unless you're Apple or Google. Blackberry maker RIM is tanking because it couldn't compete with the iPhone or Android phones—and Blackberry had a huge head start. At least Facebook knows where it can go to hire experienced smart phone engineers.

—Larry Greenemeier

[The above text is a transcript of this podcast.]

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