Don't hold your breath for another Facebook phone

Facebook's head of messaging says the company "probably" won't make its own phone again after the first one failed to gain consumer interest.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
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David Marcus, Facebook's vice president of messaging products (right), talks with Recode's Kara Swisher and Kurt Wagner about Facebook's recent efforts. Shara Tibken/CNET

HALF MOON BAY, Calif. -- Facebook Phone version 2.0 appears to be a no-go.

The social-networking giant will "probably not" be making another smartphone after the failure of its first attempt two years ago, said David Marcus, Facebook's vice president of messaging products. The revelation came Thursday during the Code Mobile technology conference here.

Facebook and handset partner HTC introduced the HTC First , also known as the "Facebook phone," in April 2013. The $99 device was preloaded with Facebook Home, a social-networking software package that turned the device's home and lock screens into Facebook-only zones. But consumers weren't interested in the device, and AT&T slashed its price to 99 cents just a month after it hit the market.

Despite its failure to sell mobile devices, Facebook has benefited from people on the go. The Menlo Park, California-based company said in July that 76 percent of its advertising revenue came from mobile devices for its second quarter.

Marcus said Thursday that 25 percent of time spent on a mobile device happens through one of Facebook's apps, which include Messenger, WhatsApp and Instagram.

"People spend a lot of time using Facebook products on their smartphones," Marcus said. "We build partnerships and have relationships with all the mobile operators around the world."

Marcus, the former president of PayPal, has become a key figure at Facebook since joining last year. He's headed up the company's text-messaging project, managing teams developing the company's Messenger app.

Over the past year, Facebook has ramped up its efforts with Messenger, allowing app developers to more easily connect their apps to the service to help people share items like music and animated pictures. The app has also joined the company's burgeoning artificial intelligence efforts with the addition in August of a new digital assistant service called M, which is intended to help people find restaurants or decide on a good birthday gift. It's comparable to services like Google Now, Microsoft's Cortana and Apple's Siri.

"It does different things from the [other virtual assistants] you can find in the marketplace now," Marcus said Thursday. "It can book a hotel on your behalf. It can book flights. ... It's very early days, [but] right now it shows some promise."

M and other initiatives have helped push Messenger to become one of the most widely used services in the world. Facebook said in June that 700 million people used Messenger at least once a month, making it nearly the same size as the WhatsApp text-message replacement service, which in September tallied 900 million users. Facebook broadly said it counts about 1.5 billion people using its social network, not including WhatsApp or the Instagram photo-sharing service.

A look at the HTC First, aka the 'Facebook phone' (pictures)

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Marcus on Thursday said that separating Messaging and the regular Facebook service was "absolutely the right decision."

"Messaging on Facebook is so much better now that we've split the capabilities," he said. Messaging "needs to be autonomous enough so people don't think of Messenger [as serving] the sole purpose of messaging your Facebook friends."

Marcus noted that many people sign up for Messenger without having a Facebook account. In the coming months, the company's Messenger effort will focus on ways to make it easier to privately share photos with friends rather than posting them on a news feed. Facebook also wants to make "Messenger a first-class messaging client and make it very fast so people start using it as their primary messaging platform," he said.

Meanwhile, Marcus said Facebook doesn't want to become a player in payments despite steps it's taken to smooth purchasing for users.

"We're working on removing a lot of that friction," he said. But the "intention is not to build a payments business. We don't want to make money off of payments."

CNET's Ian Sherr contributed to this report.