What's the deal with the Facebook Phone?

desire in your heart. I gave you this such a waste. Contemplate this on the tree of whoa whoa, whoa. Well, we have two quotes for the price of one much shorter than the other, right, right, So you get a bonus point if you you can name the other quote a third of a point. I shall I shall go so far as to say that quote has nothing to do with what we will be talking about today. No, because we are talking about the Facebook phone, or the rumor I should say, have a Facebook phone right now.

This rumor first surfaced on the interwebs back on September nineteen. Yes, that's when a certain Mr Arrington of tech crunch fame wrote about this, quoting some unnamed sources stating that Facebook

was looking into designing a phone, and uh. It was quick to point out even in that piece that Facebook was not necessarily looking at designing the actual hardware, but rather designing some sort of interface or operating system that would rest on that hardware and be deeply integrated in the handset, so that Facebook would kind of guide your entire experience on the phone. Yes, and that's really not unusual.

Um no, no, Apple and Google are both doing that. Yes, absolutely sou So the question is are they actually going to do that, And the answer is definitively maybe. Yeah. Here's the thing is that Facebook came out very quickly after this report was published on tech Crunch to deny the claims, but they denied it in such a way that it sounded almost like it was arguing semantics, like like they were saying, no, no, we're not designing an

interface for a phone. We're just developing some new interfaces to go with smartphones. And you think, wait, that's what we said you were doing, and like no, no, no, look over here, it's a picture of Chewbacca. Uh yeah, it was the Chewbacca defense. It was um uh, it definitely seemed like they were the Facebook executives were trying to back away from something while not categorically denying it. Um and the Arrington had some interesting evidence to to

point to. I mean evidence in the loosest sense of circumstantial evidence, I guess is what you would call it. And part of that was that he had suspected that who Facebook employees, in particular two very high ranking ones. We're working on this project. Yes, Joe Hewitt and Matthew Papas actually have no idea how to say his name because I'm not Greek. Well, but both neither of those two gentlemen are strangers to the smartphone software designing world.

That's true. Hewitt actually was one of the people who worked on the Firefox browser and and so he he was developing Facebook applications for iPhone and things like that, and then apparently got kind of tired of doing that. Um. So Arrington suggests that Hewitt may be working on this new interface for a phone, like a Facebook branded phone. Uh uh, Matthew, because I'm going to say Matthew just because I don't want to ruin the guy's last name. I like I said, I'm not exactly certain how to

how to pronounce it, because my Greek is terrible. My Greek is worse than Shakespeare's and his was pretty darn bad. So Matthew was. He came from Google. Actually, he had been working on the Google Chrome operating system, and Facebook lured him away. And Errington said, what could possibly lure an engineer away from a project as interesting as the Google Chrome operating system appears to be? And so Errington's conclusion is that the Facebook phone is really the only

thing that makes sense to him. So again, circumstantial evidence. Yeah, and at this point, um, at at the point at which we are recording this in late September, um, there's nothing that definitively states that Facebook of the company is going to build a phone for certain, I mean, even with a with a partner, that Facebook will come out with a phone that has Facebook on it, you know, on it as its brand name. Sorry that that didn't

come out right. Well no, no, but just just like just like the HTS, the phones and other Android phones, some of them have the Google brand printed on the phone. Even though Google did not design the hardware. In some cases, Google had a very tight relationship with that hardware provider, so that the specs would would be able to support the operating system Google was developing, but ultimately that design

rests with another company. That's the same sort of thing that we're talking about here is that, Uh, we don't know if there's going to be a phone that comes out that will have Facebook's logo on there as part of the phone. But absolutely mobile phones are of different sorts are prime targets for Facebook. Um. That's been proven through other applications for Android and iPhone and others, um,

BlackBerry and UM. They actually, you know, this is something that they really want to do, uh, and they want to be available to mobile customers. And I think mobile customers want to have access to Facebook, especially with smartphones that have a more rich experience than than others might um with the hardware. Um. The thing is, why would Facebook want to do this other than you know, hey,

we just like to make the service convenient for our subscribers, right. Um, it's really the same reason that Google and Apple want to do it. It's it's really and it's really a an attempt to define what your mobile online experience will be. Right because right now, Facebook is an app that rests

on another operating system, as a foundation. So Facebook is just one of those things, or the Facebook apps are just one of those apps you can access along with all the other dozens of apps or hundreds or thousands of apps that are available for whatever platform you're using. But once you close out the app, unless you're using other apps that connect to Facebook through Facebook connect, uh, you're not. You're no longer really relying on the platform anymore. Right.

Facebook would like to create just like any other company would like to create a platform where everything is kind of integrated through their system. It gives them way more information, which as we know Facebook, for Facebook, information is money. Yes, And uh, I think that Marguerite Reardon and Caroline McCarthy, I've seen it, probably have hit the nail on the head on exactly what type of information Facebook would like

to make available to you. And uh, it's uh, it's not really Farmville, although I think there's an app for that. Sure for most phones. There is for the the iPhone, I know, Um, but no, it's not that at all. The information that Facebook wants to make available to you

is the advertising information. Um. As the they McCarthy and uh Reardon cided the International Telecommunications Union, who said that five billion people worldwide are using some kind of cell phone, and um, you know, since Google and Apple control the ad markets on their respective platforms, Facebook, it would make sense that Facebook would want to leverage the plus million users who are using their website, um as they already do and with their partners to try to advertise to them.

And so this would be a prime opportunity for them to do that. And that's a good reason for them to actually make the move, right. It's another revenue generator if they if they were able to leverage the mobile world the way they have the web, just the basic web, Uh, they could you know, you're talking about the potentially doubling or more your revenue. I mean that's and keep in mind this is still a private company. This is that's when you sit there and think about how much money

Zuckerberg is supposedly worse. That's a mark Zuckerberg founder and CEO well some some some dispute the founder part, but definitely ceo Facebook. He um. He was recently valued at some crazy I think it was like twenty four billion dollars. It was a it was a really high amount. Um. You would imagine that number would grow exponentially or at least, maybe not exponentially, but at least linearly from if he were able to leverage the mobile world the way he

has the web world. And you were speaking about seen it Seen It also has reports from hardware manufacturers that Facebook has Facebook executives have approached them about creating a device that would allow Facebook to be deeply integrated into the phone's features and article. And in fact, they've gone so far seen that actually has gone so far as

to suggest that, uh, they're working. Facebook's actively working with I n Q Mobile, Yes, to create two smartphones that will be really heavily Facebook have heavy Facebook integration with them that would launch over in Europe in the first half and in the United States in the second half. And that's funny because uh, and connected to the A, T and T network. I just wanted to finish that. Sorry,

I didn't mean to interrupt at all. Um. Yes, actually, uh that goes also along if if you think about it with um recent rumors again that Facebook is plotting um, and that's a good word plotting, Yes, well, actually in a in a good way for them, um, not in a sinister sort of way. Um. Seriously planned making plans again for an initial public offering of stock. Um that would help help them do some um, you know, add some badly needed cash for adventure of that sort of

uh scale. I would imagine. However, the number I saw, actually the date I saw on that was when I saw that again this morning. So if the phone that would mean that the phones would hit, that would be before the rumored again again again I p o. There are so many rumored I p o s for Facebook

at this point. Yeah, Facebook, pretty much ever since Facebook started taking off, there have been rumors about when they would have a public offering, and you've got to I'm sure that the investors in Facebook are eagerly anticipating that day because it's going to turn them all into even more filthy rich people than they already are, because of course, you know, Facebook is funded by lots of well now it's got revenue, but it was initially funded by by

some venture capital investors. So but now it's of course, it's actually making money. It's not just an unlike Twitter, which is a you know, a service that still doesn't really have a viable business model, Facebook actually does because they make their money through advertising, and of course, and that's exactly what we were talking about earlier with Facebook using the information you have through your phone, uh as

another yet another UH commodity to sell to advertisers. And in fact that that kind of leads into a discussion about things that we need to be concerned about. If there is to be a Facebook phone, Yes, and privacy is way up there, because Facebook, of course is UH infamous really for the way that it handles privacy or doesn't handle privacy, depending upon your perspective on the matter.

And Zuckerberg himself has been known to say in one way or another that privacy is a it's an outdated concept, you know, and for someone who says that he's actually a remarkably private person, but he claims, or he has claimed in the past, at least in a circumcans circumspect way, that privacy is on the way out, that it's it's something that is just not really valued anymore, and so UH as a result, you shouldn't have to worry about

it so much when you're providing services. UM. Now, that's landed him and Facebook into some hot water among consumers and consumer groups advocacy advocacy groups in the past. So I would imagine a Facebook phone would bring even more questions because think of it this way. The idea with integrating the Facebook elements into the phone, It may have things like turning your contact list into a Facebook friends list. Right, So, then you start wondering, well, how much of this information

is Facebook really accessing or capable of accessing? Are they able to see who all my friends are? I mean imagine they would be able to because it's so deeply integrated into Facebook. Would they be able to see who I call and when? Would they be able to see how long my phone calls last with particular context? How would they use that information? Would they then start to make other connections? Like let's say that they know for a fact, because of the of my behavior on Facebook

that I have a deep interest in football. Let's say, you know, let's say I've joined the fan page of a couple of football teams, maybe the fan page for the NFL itself, and that maybe even some fantasy football leagues. Things like that, and Facebook Facebook says, all right, well, clearly this guy's nuts about football. So he's a valuable asset to anyone who would advertise to such a market.

Right now, let's say that you're making lots and lots of phone calls to your buddy Billy, And so Facebook's now got you know you're using a Facebook phone. Facebook looks and says, hey, look this, this guy who's really crazy about football is always calling his buddy Bill. You know what, I bet that they share a lot in common and there's a good chance that Bill is also

a big football fans. So how about we sell Bill two advertisers as well, and maybe there maybe you have different tiers of people like you have the one tier where you're like, these are the people who are definitely interested in your product because they have demonstrated that on Facebook. Here's the next tier down, which are the context of those people who are the really valuable audience. These are people who are likely to also value your product, but

we aren't assure. Yeah, like, I mean, that's just an example. I'm just pulling that out of the air. That could be miles away from what anyone's thinking, but it's the source of stuff we have to worry about. You know, how much are the information of ourselves are we giving away? And how much information about the people we know do

we give away? Yeah? Yeah, well really that could be anyone though, I mean It's funny because the Facebook aspect of it, because there have been so many concerns with Facebook dot Com and privacy users privacy in the past. It really the same things could be asked of any carrier or provider of application, because there's there's really no telling what kind of information these applications are sending back.

And I wouldn't I wouldn't uh say that we should all go out screaming in the streets and bash our smartphones into you know, lead and glass, inert pieces of uh trash simply because of this. I mean, I don't think it's that kind of thing, is uh rampant or anything like that. I just think, you know, it's funny that Facebook makes us suddenly go, hey, well, how's Facebook gonna you know, if we have a Facebook phone, you know,

what will they do with our privacy? But I'm going, well, you know, why couldn't that be said of you know, any of the providers. They have the messages that travel across the network on encrypted um and uh you know, there there's information. I saw somebody recently say, um, you need to be careful when you turn in your old phone because you know, if you don't clear out your address book. What what information is stored in the phone's

architecture itself, the memory inside the phone. If you do, do you actually clean it out or do you just turn it back in and hope they're going to to mulch it. Well, you make an ex in point because obviously, uh Android, Google Android, that the way Google Android works is you you give that information over to Google. You create a Google account if you don't have one already. Your contact list is stored in the cloud with Google. Yes, you know, all of the apps you buy are stored

in the cloud with Google. So ultimately Google has that information. And there there have been people who have brought this to light saying this is this should be concern people at least on some level. You should at least ask questions like what are you doing with this data? Uh? And some people definitely hold Google under close scrutiny and

they are very suspicious of the company and its goals. Right, But I don't think that even that being said, and despite how pervasive Google is and how a lot of people would say that at this point, we the Internet would not be the same without Google, Like if Google

went away, the Internet would really suffer. Um, I still think that people hold Facebook to an even higher level of suspicion, mainly because of its fairly well publicized bouts with privacy issues, particularly the fact that in a Facebook profile you have to opt out of so many things in order to keep them private. You know. It's that that a lack of privacy is the standard at Facebook. It's only by going through and tweaking your settings that

you are able to control your privacy. Otherwise you have a very public uh profile out there, including things like Facebook Places, which brought up a whole new rash of questions and concerns. And I would imagine that Facebook Places would be very heavily integrated into a Facebook phone, almost to the point where you could, you know, just ad a touch of an app, you would you would automatically update your Facebook profile to explain where you were like that.

That would that makes perfect sense to me from a the perspective of Facebook. Well, yeah, I mean it's already been um, it's already been noted. Uh Rearan and McCarthy in their article. Uh we're pointing out that over the last little while here they've Facebook has updated its application to include all sorts of uh, you know, other bells and whistles like geotagging. Um. And it's the the application has become more a little bit more like an operating system,

they had said. Plus they bought a company called hot Potato, which is uh sort of you know, it's the geolocation checking in uh feature that you see on on so many applications these days. Um. You know, so that that will give advertisers more information about where you are, so they could say, hey, well, if you're down here at this corner, you should come eat at my restaurant. You know, we're right down the block. Um. But I definitely think it's the kind of thing that is that's not kind

of go away. Now that that Apple and Google have embraced it. UM, I did note and Electronista UM that Research in Motion, the parent company of BlackBerry, has just as of the this recording, just released the BlackBerry Advertising Service, which is they're going to split revenue um sixty forty. The advertisers get the revenue, but they're going to give more control over the the application of advertising to the

app developers. UM. Not as much as you know, Apple has control over what can be done over the user experience. Course that that will be interesting to see what happens with that. But now that that BlackBerry, Google, and Apple are all into the mobile advertising market, companies such as Facebook and Amazon and other people who are large media companies um, online media companies are probably going to look to that as a source of of revenue and find ways to uh gain the presence in there and to

bolster their things. And I know that people are probably saying, you know, Amazon, where are you talking kind of out but I've seen some signs that they are interested in developing other kinds of applications for mobile use, So it's not out of the question. I don't think they would be as far you know, I don't think there would be an Amazon phone, at least not before Facebook comes out with one. But I wouldn't imagine that it's out of the question. I mean, it's always looking for new

and innovative ways to make money there. They're hosting service application service, UM. You know, it's not something that I wouldn't necessarily consider an Amazon core business, but it's something that they're in well, and they're already integrated with other operating systems pretty well. I mean the Android system in particular has Amazon integration where you can very quickly with like a one touch thing by Songs off of Amazon, for example, which is just that that's just a tiny

baby step of integration. Uh. Well, they're definitely open minded enough to make kindle applications for Android and the iOS. So and that kind of leads into the discussion about why Facebook might be backing away from from these claims, why Facebook might be denying them. It's part of it is just that they're treading a very thin line here, right.

They have to be really careful. They want to be able to From a business perspective, it makes sense that you want to be able to integrate your your services more tightly into the hardware so that you have you can gather as much information as possible and solid advertisers. Let's just boil it down to that. But on the other hand, you don't want to uh antagonize, right, Apple and Android and all of these other providers that are are you know, these other uh smartphone operating system developers.

Let's say that that provide you a platform for your app. You don't want to alienate them. You don't want to give them a reason to no longer allow your app on their devices. Even though I seriously doubt that would ever happen because Facebook is so popular it would really surprise me. I mean, granted, I guess people could always navigate to the website via the mobile browser, but it would really surprised me to see those apps go away.

But you don't want to antagonize them, because even if you come out with your own branded phone, you're going to be competing directly with them in the marketplace. And they're big boys. Yes, they Android and Apple have a huge head start. Apple in particular has a huge head start. Um. I mean, Symbion is still the worldwide dominant operating system for mobile phones, but in the United States, Apple and Android and to a lesser extent, rim are really they're

the big players for the smartphone space anyway. And of course there's the Windows Mobile seven. You know that that's due out very soon and that may make a big impact. I've heard some positive things there. Yeah, I've seen the demos I've seen of it look very good. Whether or not it's going to be good enough to to really go toe to toe with the other big boys that will,

I think that will mainly depend upon the hardware. Like really, that's the big advantage Apple has over everyone else is that they they've dictated exactly what the hardware and software are going to do, and so they have full control of the package, whereas uh, Android and Windows Phone seven are somewhat slave to whatever the handset manufacturers are able

to come up with rems. Like Apple, but then rem is more of the enterprise, not the consumer, and they have far more models out to right then than if the iPhone. Right. So, so one argument I've seen is that Facebook might target a more like a messenger phone, you know, a feature phone that's not a full smartphone. Yeah,

that's what the the inc information suggests that it is. Specifically, it's it's smarter than a dumb phone, but not as smart as a smartphone, right exactly, which which might be the right target, because then you're hitting people who maybe maybe they don't want to shell out the money for a full smartphone where they're not going to use the other applications, right, So it makes sense to to take aim for that market, and then you don't really directly

compete with Apple and Android because it's it's a different market. It's like, you know, it's like sports cars versus compact cars. I mean, it's two totally different markets. You don't have to worry. You're not in direct competition with one another. Yeah, you're both vehicles, but you're not aiming at the same market. One's aiming at people in their midlife crisis and the others. I mean, it's smart, same people. Um hey, I'm getting up there. Man, I'm going to be in sports car

bode before you know it. But well, okay, there's that, but you know details details, You could buy one and sit in it, right, So I thought I would also quote Zuckerberg. He actually did an interview with tech Crunch to kind of clear the air about what was going on here. Did you read about this? No, well I didn't. Yeah, a little bit about it, but you didn't actually, Yeah. So here's here's what he says. And this is this kind of goes back to the whole contradictory message that

Facebook is giving. You know, it's one of those things where you use so much jargon and double speak that at the end you're not really sure what exactly was said. So here's here's what Zuckerberg had to say. At the end of the day, when people say building a phone, they actually can mean very different things internally, the way we talk about our strategy, it's like the opposite of that.

Our whole strategy is not to build any specific device or integration or anything like that, because we're not trying to compete with Apple or the Droid or any other hardware manufacturer for that matter. Take instant personalization. Our goal is to make it so there's as little friction as possible to having a social experience. So you go to some apps, take Rotten Tomatoes, which we just launched last week.

If people had to click the blue button to connect, then some percent of them would, but it would take it would be the minority because you don't know exactly what you're going to get before you click it. If you had to put up some modal dialogue, then that would be crazy from a u X perspective. But the fact that they can do that instant integration for the users that want it means that everyone has a good experience as soon as they get there. On phones, we

can actually do something better. We can do a single sign on if we do a good integration with a phone, rather than just something where you go to an app and it's to Magley Social or having to sign into each app individually. Those are the two options on the web. Why not for mobile just make it so that you log into your phone once and then everything that you do on your phone is social. Okay, do you spot

the incredible contradiction there? He says at the top of it that they are not looking to create any sort of integration, but at the end of it, he's talking about having a phone where as soon as you turn your phone on, you're signed into these different apps that normally you would have to sign in individually. I would wager that Facebook is hedging its bets. I would wager that that's saying two things that are opposite of each other. That is, that is integration. I mean that is what

that that that's true. But what I'm what I'm thinking is that it's it's entirely possible that uh, Facebook is considering a phone of its own and making the other apps so integral into their own environments that really you could do you could be that immersed regardless of what platform you're on. That's kind of how I hear it. But yes, directly speaking, he was saying that. And by the way, u X, for those of you who don't know, is user experience because I guess you e sounds kind

of lame. I guess maybe I don't know someone's going to write in and explain what you actually means. And that's why that's true. It could be taken maybe could just be anyway. So that's what that's what Zuckerberg had to say to tech Crunch. Um, you can actually read more of it at tech Crunch. They they've got a whole thing on it there. But it's Yeah, it's interesting to see the kind of dance that that Facebook is

doing right now around the whole mobile phone issue. And Uh, what I'm curious to hear about is whether our listeners would consider buying a Facebook branded phone. Are you concerned about the privacy issues? It may be that the privacy issues we've talked about aren't really issues. It may be that there is no danger of that. It would surprise me, but it's possible. Uh, would you find that sort of

phone interesting? Are you the kind of person who you don't have a smartphone, but you would like your regular phone to do something more than what it already does you kind of want something in the middle. Does this actually sound like an interesting device to you? Or are you the kind of person who you would just prefer to have a Facebook app on your existing phone and not have like a fully integrated phone. Yeah, I think for me it would it would be something like the Ladder.

I'm I'm more interested in the multiple functionality of you know, as a full on, full fledged smartphone. UM. The idea of having Facebook so fully integrated to the point where they can be of more have more control over the experience, UM seems like a good idea if you're really into

Facebook all that much. But uh, you know, there it's going to be interesting when diaspora or diaspora actually starts up to see if there is the uh an x this or a co joining thing where people are on that network too, and if you know, other social networks can start making inroads on Facebook's turf. UM, I think more people would be inclined to buy something on which they could use more than one social networking service. It's definitely an uphill battle because the biggest, the biggest draw

to Facebook is that everybody's on Facebook. Yes, you know, everyone's on everything else too. You would have to you would have to have a mass exodus, really, or at least you would have to have a lot of people change in order for it to really take effect, or the other way around it is you could get you could convince new users, people who are not not yet integrated into some online social network to adopt a different model than Facebook. Then you have then you're going to

be able to survive. It's just gonna be something that you have to play the waiting game. You essentially wait for all the Facebook users to die out and then you become the new thing. But yeah, getting people to move is really tough. Anyway, we have run out of times. We're gonna wrap this up. It will be interesting to see if Facebook does come out with a branded phone, and if it does, how successful or unsuccessful and ultimately will be Uh. Facebook's managed to triumph in the face

of adversity many times before, so we'll see. And if you guys have any questions or comments, especially if you want to tell us about whether or not you would adopt a Facebook phone, let us know on Twitter or on Facebook. Our handle at both is tech Stuff hs W,

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