San Francisco, CA

Bloomberg broke news that social network giant Facebook and Taiwanese mobile device maker HTC are working together on a smartphone.

The two companies previously planned to unveil their own smartphone before the year ended, but Facebook decided not to rush and gave HTC more time to develop the product. Facebook is said to be in the process of developing an operating system. The team tasked with building the operating system is composed of former Apple software engineers.

An estimated 50 percent of Facebook users access their accounts via mobile devices. Even with the 450 million users on mobile phones, Facebook has been unable to translate those numbers into advertising sales.

According to Topeka Capital Markets Inc analyst Victor Anthony, "Usage is shifting to mobile, and they have not been able to monetize mobile. To the extent that it's a device you own and carry around with you at all times, and it ties into the Facebook experience, it will be beneficial. They could then put a lot of ads onto the platform."

The team assembled by Facebook to work on the operating software are, " Greg Novick, who helped develop the touch-screen user interface; Tim Omernick and Chris Tremblay, who also worked on the device's software; and Scott Goodson, who helped create the stock-market application, according to people with knowledge of the hires."

Facebook announced its initial public offering in May and since then its stock has decreased by 23 percent. Only four months ago did Facebook start showing mobile ads and it has not benefitted the company yet.

Facebook released in a statement:

"Our mobile strategy is simple: We think every mobile device is better if it is deeply social. We're working across the entire mobile industry; with operators, hardware manufacturers, OS providers, and application developers to bring powerful social experiences to more people around the world."

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