Is Facebook smartphone really dead?

Zuckerberg's TechCrunch interview prompts a rally in the shares of his social network but leaves tech media puzzled.

By Jonathan Berr Sep 12, 2012 1:25PM
Woman sitting on steps with smartphone, copyright Image Source, Image Source, Getty ImagesFacebook (FB) CEO Mark Zuckerberg said Tuesday that developing a smartphone was "so clearly the wrong strategy for us."

His statement surprised many observers, including the technology press, which has reported repeatedly that the social network was moving in that direction.

At least one prominent Facebook observer, however, isn't convinced. Nick Bilton of The New York Times denies the media was led astray and doesn't think Zuckerberg's word on the subject is final.

"The tech press didn't get this wrong; Facebook got it wrong," Bilton wrote in an email to MSN Money. "Facebook had every intention of building a phone -- they still might -- but it's inaccurate to say that the tech press got it wrong when Facebook has been actively, and unsuccessfully, exploring its own phone for over two years."

Biliton, who wrote in the Times in May that Facebook "hopes to release its own smartphone by next year," said he also reported that the social network was having difficulty getting its act together. Other sites, including AllThingsD, confirmed this, noting that Facebook's chief technology officer, Joe Hewitt, who was overseeing the phone project that was code-named "Buffy," was leaving the company.  

Facebook is not an easy company for reporters to write about. As with Apple (APPL) before it, reporters covering Facebook must rely on anonymous sources because the social network orchestrates its media relations with the precision of a Hollywood director. 

Journalists didn't come up with the idea of a Facebook phone on their own. The company probably egged the stories on by feeding  reporters information that couldn't be attributed to it. For investors, this should be a cautionary tale.

Though shares of Facebook rose Wednesday after Zuckerberg's comments, don't expect the wunderkind CEO to start blabbing to anybody with a microphone. That's not how he rolls. Indeed, Zuckerberg can afford to be patient with his Facebook shares, because he already has more money than most Americans will earn in a lifetime. Ordinary people who bought the stock will continue to have a difficult time separating Facebook hype from reality for some time to come.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.

Sep 12, 2012 4:55PM
Facebook, 3-4 years ago was cool and was a buzz.  Not anymore as users find their site and software changes annoying and got screwed on their stock.   I doubt ANYONE would be anxious to buy a "Facebook phone"... seems like a ridiculous business plan to me.
Sep 12, 2012 4:18PM
Sep 12, 2012 2:30PM
FB would be nuts to enter mobile device markets unless they just private label a device from Nokia or Samsung or both.  Words are cheap and it's going to be really difficult to monetize FB's community.
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