One of Facebook's first 20 employees says the company lied to its own employees about whether it was developing a 'Facebook phone'

Charles Platiau/Reuters

Mark Zuckerberg.

• Facebook wanted to launch its own smartphone to rival Apple and Google, the details of which were reported in Steven Levy's new book, "Facebook: The Inside Story."
• The project, which never came to fruition, was so secretive that Facebook even denied the project to fellow employees, says the book.
• Levy quotes early Facebook employee Ezra Callahan saying it was "the first time I recall Facebook lying internally."
• Facebook never made its own phone, but a few years after the project it collaborated with HTC to launch the HTC First phone, which was customized to include Facebook in the phone's software but was ultimately a flop.
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Facebook's effort to launch a co-branded smartphone with HTC back in 2013 ultimately flopped, but its original vision was something much larger: a Facebook phone built entirely by the company from scratch.

The project was so secretive that Facebook didn't even tell many of its own employees about the endeavor, according to Steven Levy's new book, "Facebook: The Inside Story," which documents the social media giant's early years.

In the book, Levy details how Facebook's plan to launch its own smartphone came to be, including the people within the company that were tasked with spearheading the project. The phone was nicknamed GFK for the Wu-Tang Clan member Ghost Face Killah, according to the book - a detail that The Verge's Casey Newton first pointed out.

Leading the project was Chamath Palihapitiya, a prominent venture capitalist who worked at Facebook for four years from 2007 through 2011. To keep the project low-profile, Palihapitiya moved his team to an unmarked building that required a badge separate than that of Facebook's. If employees asked whether or not Facebook was working on a phone, the company would deny it to them, says Levy's book.

"It was the first time I recall Facebook lying internally," Ezra Callahan, one of Facebook's first 20 employees, said to Levy.

The phone itself, which never made it to market, was designed by high-profile designer Yves Béhar and included a special groove where the user could place his or her thumb while scrolling. Facebook had planned to work with Intel for the phone's processor, and a prototype was even built by Foxconn, the iPhone assembler. As far as we know, photos of that prototype have never emerged.

Facebook had hoped to challenge Apple and Google's dominance of the smartphone market. Instead of launching its own phone, it ended up partnering with HTC to launch the HTC First in 2013, an Android smartphone that incorporated Facebook's Newsfeed into the home screen. The phone was ultimately deemed a flop; roughly a month after its release, AT&T slashed the device's price to just $0.99, and a sequel was never made.

Although Facebook's plans to become a third contender in the smartphone ecosystem race between Android and iOS, there's no doubt it conquered the mobile world in its own way. Facebook holds three of the top 10 free apps in Apple's App Store, and two on Google's Play Store, according to data form App Annie, thanks to the success of its own app and its acquisitions of Instagram and WhatsApp.

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