5 reasons Facebook should build its own phone

Facebook plans to release its own smartphone next year, according to New York Times tech writer Nick Bilton, who cites several Facebook employees and allies. This wouldn't be the newly public social network's first stab at building its own smartphone, or even its second, and not everyone thinks it's a good idea. "Hardware is an extraordinarily difficult, low-margin, commodity business" that "Facebook knows absolutely nothing about," says Henry Blodget at Business Insider. But chief executive Mark Zuckerberg seems determined, reportedly hiring more than half a dozen former Apple engineers who worked on the iPhone. Here, five reasons Facebook would actually be wise to build its own handset:

1. Facebook already has an operating system to build on

Facebook is essentially already an operating system with "all of the elements that would be required for a device that could (theoretically at least) challenge Apple's dominance in mobile," says Mathew Ingram at GigaOm. It has your contacts, a calendar, videos, Facebook Messages for email and IM-like communication, a new Facebook Camera app plus Instagram for photos, and it even "recently launched its own Apple-style app store." A Facebook phone is "a logical extension of the walled garden" Facebook and Google have been racing to build to keep you, and your marketable surfing habits, in their respective domains.

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2. It has to justify its value to Wall Street

"As a newly public company," says The New York Times' Bilton, Facebook "must find new sources of revenue." The company's mobile ad revenue is failing to live up to expectations, and it has to do something dramatic to justify its high stock price. Still, a Facebook phone only makes sense if the company develops its own web browser — or buys Opera, as rumored — and search engine, says Tony Bradley at PC World. But with a money-generating Facebook-centric browser and search tool, and a handset to put it on as the default option, Facebook "may have a winner."

3. There's enormous room for growth

"You might not buy the Facebook phone, but your kids definitely will," says Drew Olanoff at The Next Web. What Zuckerberg and Co. seem to understand that critics don't is that you can't plan for a bright future "without talking about future generations." And the kids and teens using Facebook now "will want to use Facebook even more, as it replaces their current phone's contact list for social connections." Imagine when someone calls, you get a cheat sheet of conversation starters from their Facebook profiles, says Mukund Mohan at Be a Force of Good. Heck, "I'd buy a Facebook phone today."

4. Facebook can't afford to fall behind Apple and Google

According to one of Bilton's unidentified sources, Zuckerberg is driven by the fear that "if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms." And as Facebook has become more of a rival to its tech peers, and its relationships have soured accordingly, that seems to be a legitimate fear. Google, for example, just dropped $12.5 billion to buy Motorola Mobility, making a Google phone a near inevitability.

5. It's in the company's DNA

A few years ago, critics said Apple would flop in the phone market, says Garry Tan at Garry's Posterous. Obviously, it didn't, and a big reason is that it hired some of the best talent in the world to create the iPhone. That same ability to attract stellar, motivated talent that wants to change the world is "Facebook's biggest asset," too. Besides, with a "visionary founder who is young and in charge," I don't see how Facebook could resist the challenge.