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Facebook Phone: Necessary Risk or Fatal Mistake?

Facebook is working to release its own brand of smartphone. After a $16 billion payday at its IPO, the company has found it needs to justify its paycheck, especially as ad revenues decline.

What’s the Latest Development?

After raising $16 billion in its initial public offering, Facebook has found itself needing to justify its paycheck, particularly since the company admitted its advertising revenue is not rising proportionally to its user base. Now, it looks like the social media software giant is ready to place a lot of its chips on creating a new hardware device: A Facebook-brand smartphone. “A report from Nick Bilton in the New York Timesthat said the social network ‘hopes to release its own smartphone by next year,’ and has been hiring hardware engineers and developers—including several from Apple—as part of that effort.”

What’s the Big Idea?

A Facebook phone would be another chapter in the “walled-garden” story, used by the nation’s largest technology companies–Apple, Google, and Facebook–to gain a greater share of the computing market. By creating different modules of their product, such as Google’s foray into social media with Google+, companies seek to keep users within their unique ecosystem, where more data can be harvested. The mobile market, however, is fraught with well-intentioned failures and critics say that a Facebook-centered smartphone is no longer something people want. Would you buy a Facebook-brand smartphone? 

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