The service, which is being called Reader internally, has been under development for more than a year, according sources cited by The Wall Street Journal. It resembles the Flipboard news reader service, which lets users create visually appealing digital magazines that can be flipped through and shared with others.
Facebook declined to comment on the Journal's report, and it is unclear if or when this product will debut. What is clear is Facebook's intent: increase the time people spend with Facebook.
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Though nearly one in six people on the planet uses Facebook, the amount of time those users spend with the service from mobile devices is limited to skimming and/or firing off quick posts before moving on to something else. By offering news content that users want to see or are interested in, there's a better chance they will stick around longer and, therefore, see more advertisements.
Whether or not Facebook can do this successfully is another matter entirely. The company has misfired on mobile products of late, such as Facebook Home and the Facebook First smartphone. Facebook's attempts to woo Samsung to make another Facebook phone were also recently shot down. As it is with so many things, timing is crucial.
Google is shuttering its popular Google Reader service July 1. Though Google said usage has decreased in recent years, the service still has millions of users. Those users are now being forced to look elsewhere for RSS and news aggregation services. Feedly has stepped up to the plate with its own service that extends from desktop browsers to Android and iOS devices. AOL is expected to debut its own RSS/reader service soon, and Digg is, too. Were Facebook to get its news reader product into the market soon, it is possible it could scoop up former Google Reader users who don't care for Feedly, AOL or Digg. Based on the Journal's sources, however, that outcome doesn't seem likely.
Beyond these newer Google Reader replacements, any news aggregator service from Facebook would also be contending with Flipboard, Google Currents, LinkedIn's Pulse, Rockmelt, Twitter and many others. It is possible that, due to its large user base, Facebook Reader could replace some of these, but it will be starting out at the bottom of a crowded market.
With its stock still well below its IPO price, Facebook needs to find its footing in mobile sooner rather than later.