Newsreader Reportedly Being Developed By Facebook (NASDAQ: FB)

facebookFacebook, the world’s largest social network, has announced plans to develop a new mobile device that will highlight and showcase news from Facebook users and media organizations. The device is designed to offer news items that a user’s friends are sharing or stories that are trending on the site. Providing a good way to review news stories on the device could encourage people to spend more time on Facebook where they could be shown more ads.

According to a report from The Wall Street Journal, the mobile product is codenamed “Reader” and looks like social news app Flipboard. Facebook often looks to its competitors for ideas when developing new products and services. When asked about the new device, a Facebook spokesperson said that the company does not comment on rumors or speculation.

Danielle Levitas, senior consumer technology analyst at market research and analysis firm IDC, said, “I view it as a logical next step for them. To me, it’s a place where multiple genres of media and content can come together in a trusted fashion.” She added, “They have to do everything and anything that drives engagement and ultimately delights some subset of their users.” However, a news feature may not have universal appeal for Facebook’s users.

In the U.S., smartphone users spend nearly a quarter of their time with their phones using either Facebook or Instagram, according to research from comScore. Facebook bought Instagram last year for $1 billion. People also use their mobile devices to read news, so a Facebook news option could increase that percentage. Integrating news with Facebook could potentially pull people away from other popular news reading apps, like Flipboard and Pulse.

Facebook has been investing heavily in improving the mobile experience for both users and advertisers. More than 30 percent of the company’s $1.46 billion in revenue was earned from mobile devices last quarter. This was up from 23 percent in the previous quarter. Mark Zuckerberg said, “Today, there’s no argument. Facebook is a mobile company.”

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