Facebook 'working on phone with HTC

Facebook which urgently needs to find a way to make money from its growing number of mobile phone visitors, has already hired former Apple employees who are believed to be working with HTC on the new project.

The news comes as Facebook is due to announce its first financial results since its troubled flotation on the US stock market. Shares traded in the company on the German stock exchange fell €1.28 to €22.50 in anticipation today, as Facebook gaming firm Zynga announced disappointing results of its own. Facebook shares in New York are down by approximately a quarter compared to its May 17 flotation price.

The social network is widely expected to announce it now has more than a billion users during its earnings call, but more than half of them access the site via mobile, and founder Mark Zuckerberg has identified the transition to mobile usage as his “greatest challenge”. None of the $3.15 billion in advertising sales last year came from advertising on phones.

Building its own device could allow the site to collect revenue from its existing advertisers more effectively by making sure their commercial content was distributed throughout the phone’s different functions.

HTC has already produced the first phones to feature a dedicated Facebook button, and is looking for a way to differentiate its products from those of rival manufacturer Samsung. Its flagship One X device has been dogged by bans on US sales following a patent dispute with Apple. Shares in HTC have dropped 43 per cent this year after it reported three consecutive quarters of profit decline.