Yahoo Finance Facebook worked on unreleased phone, former executive says
Facebook worked on releasing its own smartphone shortly before its chaotic flotation six years ago, a former executive has confirmed.
Chamath Palihapitiya, the social network’s head of growth until 2011, revealed that he was part of a team of employees developing a smartphone rival to Apple and Samsung.
It confirms longstanding rumours that the company planned a direct push into the smartphone market as it was struggling to gain traction on mobile devices.
Eventually, the company decided against creating a phone. It instead developed a special version of Google’s Android operating system called Facebook Home that gave special prominence to the social network’s own apps.
“I had been building a product at Facebook that ultimately didn’t get launched, I was building a phone,” Mr Palihapitiya said, speaking at the University of Waterloo. He did not expand on why the company had decided against selling its own handset, and could not be reached for comment.
Mark Zuckerberg, Facebook’s chief executive, later said that it made no sense for the company to develop its own smartphone.
“If we did build a phone, we'd only reach 1 or 2pc of our users. That doesn't do anything awesome for us. We wanted to turn as many phones as possible into Facebook phones,” he said in 2013, when Facebook Home was unveiled.
It comes as Facebook returns to hardware this week, with the expected release of a video chat device for the home. The launch of the Portal device was delayed earlier this year amid the company’s Cambridge Analytica controversy.
Mr Palihapitiya was in charge of Facebook’s international growth, suggesting the device could have been targeted at budget-conscious consumers in emerging markets who did not have computers.
In 2011, when he left the company, Facebook did not have any adverts on its mobile website or smartphone apps, and was seen as struggling with its users shifting from browsing Facebook on computers to browsing on phones.
After the company floated in May 2012, shares halved in its early months due to its problems dealing with the rise of smartphones. The company has since introduced more adverts into its apps, and mobile adverts now make up more than 90pc of its advertising revenue.
Mr Palihapitiya, who became a tech investor after leaving Facebook, has become a critic of the social network’s growth tactics since leaving. Last year he said the company was “destroying how society works”.
He said he had been rewarded with Facebook shares based on hitting certain growth targets, and that he had lost up to $2bn (£1.5bn) by leaving early because he did not want to be “a slave to money”. “It’s kind of bananas to think about this, I had equity that was triggered on the number of users,” he said.
Facebook did not comment.
