Is Facebook Working on a Phone?

Facebook denied a story published this weekend that says the company is "building a mobile phone," but CNET has confirmed that the social-networking giant has reached out to hardware manufacturers and carriers seeking input on a potential Facebook-branded phone.

TechCrunch published a story saying "Facebook is building a mobile phone...or rather, they're building the software for the phone and working with a third party to actually build the hardware." Facebook quickly tried to discredit the story, with a spokesman telling CNET that "Facebook is not building a phone. Our view is that almost all experiences would be better if they were social, so integrating deeply into existing platforms and operating systems is a good way to enable this."

However, Facebook appears to be splitting hairs over the phrase "building a phone" because the reality is that the company this summer did seek input from hardware manufacturers and carriers as it kicks the tires on whether a Facebook phone indeed makes sense. The idea is simple: an outside company such as Samsung or HTC would build the hardware for an Android-powered phone that would have Facebook's social-networking features deeply integrated and would run on a carrier such as AT&T, possibly under an exclusive deal similar to the iPhone.

Notably, even though Facebook issued a lengthy denial, the spokesman did not respond when CNET asked if the company is considering marketing a Facebook-branded phone made by a third party.

One source familiar with the matter said the concept is in the very early stages and Facebook apparently has not determined whether to proceed. However, around Silicon Valley, Facebook is notorious for floating ideas that get leaked, but the company either walks away entirely or goes in a dramatically different direction.