Home Why All the Facebook Rumors? Company’s Slumping Share Price Could Have Something to Do With It

Why All the Facebook Rumors? Company’s Slumping Share Price Could Have Something to Do With It

It’s not surprising that Facebook is developing a phone, as reported last week by The New York Times. What is surprising is how the story has been covered with a sense of awe, and no one has bothered to question how news of the Facebook phone – as well as a rumored acquisition of Opera – leaked during Facebook’s first full week as a public company.

Both moves would make sense for Facebook as the company tries to grow revenues, further integrate its services across the Web and show that it can succeed in mobile. But the timing of the leaks – at least a year before Facebook would be able to release a smartphone – is suspect. Would we be hearing about these new initiatives if Facebook shares weren’t slumping or if the company weren’t facing potential lawsuits from investors?

The fact that Facebook is developing a smartphone is nothing new; these rumors are becoming an annual rite. TechCrunch covered the first round of rumors in 2010, and they were repeated again last year when AllThingsD reported that Facebook had entered a partnership with HTC to create a smartphone. That project, codenamed Buffy, is presumably still in the works.

Officially, Facebook is keeping mum on the subject, simply referring reporters to the same statement it gave AllThingsD last year: ““We’re working across the entire mobile industry; with operators, hardware manufacturers, OS providers, and application developers.”

The company is saying even less about the rumored Opera acquisition, but such a move also makes sense. Just look to Google’s success with Chrome, which further integrates Web browsing into the overall Google experience. Buying an existing browser maker like Opera would give Facebook a head start on developing the product and may help Facebook alleviate some of the inevitable privacy concerns that critics will raise.

What should be surprising is the number of Facebook partners, employees and ex-employees who are willing to talk about the initiatives. These are the same partners, employees and ex-employees who almost uniformly heeded the company’s quiet period and coordinated public relations push leading up to the IPO. 

Yet, with shares slumping, Pocket-lint, which initially reported the Opera rumor, is quoting a “man in the know,” and dozens of outlets have been able to get comment on the specifics of the smartphone development, including the number of ex-Apple employees now working for Facebook and details of conversations that CEO Mark Zuckerberg had with engineers about the telephone project.

Keep in mind that this is a company that rather famously releases products first and asks questions later. Both a Facebook smartphone and a Facebook browser have seemed inevitable for quite some time; it was always just a matter of when. But the leaks are something new, and could be one of the first noticeable differences in the pre- and post-IPO version of Facebook.

Image courtesy of Shutterstock.

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