This week Techcrunch caused a stir by reporting that Facebook are buildinga phone.This has been flatly denied by Facebook, so we’ll assume for the moment thatthe reporting was erroneous and no such phone is on the way. I’m desperatelydisappointed. To repeat a joke first made by Nat Friedman: I think I’m goingto mail $1000 to Palo Alto with a note, and sit waiting for my FacePhone.Here is why Facebook should be building a phone.

A phone is social

Nokia has apparently used its “Connecting People” advertising slogan since1992, early recognition that phones are essentially social tools. There hasbeen a huge amount bolted to phones since that time. They have become‘convergant’ devices, an amalgam of your laptop, camera, walkman, GPS andGameboy. There are some very obvious synergies between these functionalmodes and the core social networking purpose of a phone, but I see them asessentially separate. The camera is used in a pinch, the internet browserfor info on-the-run, and gaming for entertainment on-the-bog. Phones are allabout connecting people and they always will be. Unfortunately this is theaspect I believe has seen the smallest real innovation so-far in thesmartphone era.

Despite the rise and rise of Facebook the 160 char text message is still themost widely used social application with 4.1 billion text messages sentdaily. I don’t wishto belittle Facebook’s achievements here, 1 billion daily messages is truly a phenomenon.

Integration is poor

The feature most-likely to impress people when shown my Nexus One is thattheir Facebook profile photo shows up in the contact list. In-fact theFacebook integration is probably one of the best features of Android.However integration doesn’t run very deep, and in many ways is clearlybroken. Merging of contacts is somewhat hit and miss. I’ve yet to work outwhen a contact gets merged and when it is duplicated. Facebook chat doesn’twork, or at least not in the default settings. While I’m able to keep intouch with a few of my friends through Google chat, this isn’t really wheremy canonical contact list lives. Part of the contact list problem is that sofew people leave their phone numbers with Facebook, forcing me to keep twolists. A Facebook phone would surely go some-way to alleviate this issue byencouraging users to tie their Facebook and Phone accounts together.

All of the above issues could I’m sure be solved through a better, moreintegrated Facebook app experience but they will constantly be fightingagainst the vested interests closer to the consumer. Google especially hasgood reason to keep the Facebook experience poor and push its GMail / GoogleTalk experience as default on Android. The carriers would prefer consumersto continue using text messages. Although Apple doesn’t have any seriouscompetitive areas with Facebook, I doubt whether the real ownership of userexperience required for deep integration is something they wouldcountenance.

There is a golden user experience waiting to be built here. One where‘Blocking’ someone on Facebook also causes their calls to be screened.Profile pictures of long-lost friends will be shown with every phone call.Making friends could be as simple as bumping phones togetherand give you access to numbers, email and Facebook feeds. None of theexisting phone OS’s have gone far enough and the number of players involvedmakes me feel it could be a long slog.

Location means revenue

I have no idea how Facebook are doing in building their revenue stream butownership of the mobile experience is surely one way to give it a massiveboost. Facebook are the kings of social and their recent addition of‘Places’ shows that they are serious about competing with Foursquare andYelp when it comes to location. Currentlythe Foursquare experience is as integrated in-to smart phones as Places,probably more so. A better integrated experience means more check-ins.

Google might have created a huge advantage here. If they can find a way toleverage Android to get more information about user location they will havethe double whammy over Facebook in terms of user data. Google already havemore ‘purchasing intent’ when people search on their web-site. Withknowledge of where the user is they will likely have an insurmountable leadin delivering targeted advertising to consumers. Facebook is desperate toget more knowledge about their users, surely location is the next big driverfor that success?

Consumers will win

For the consumer a FacePhone is win-win, even a commercial failure wouldforce other innovators such as Goole and Apple to move at a faster pace. ForFacebook the risks are great, but so are the rewards. Please Facebook, stepup, and show us what real innovation means in mobile + social.