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<... p> TechCrunch first posted a report on this Sunday morning, boldly headlined "Facebook Is Secretly Building A Phone." The post, citing only "a source who has knowledge of the project," claimed that the Palo Alto, Calif., company "wants to integrate deeply into the contacts list and other core functions of the phone. It can only do that if it controls the operating system."

Writer (and TechCrunch founder) Michael Arrington then freely speculated about what such a device might look like:

But I'd speculate that it would be a lower-end phone, something very affordable, that lets people fully integrate into their Facebook world. You call your friend's name, not some ancient seven digit code, for example. I'd imagine Facebook wanting these things to get into as many hands as possible, so I'd expect a model at a less than $50 price. Pay your bill with Facebook Credits. Etc.

Facebook quickly denied the story to other sites, which only seemed to irritate Arrington. TechCrunch ran two more posts on this Sunday, one noting how Facebook's denial mirrored those issued by Google before it unveiled the Nexus One Android smartphone (never mind that device's subsequent failure) and another skeptically interpreting Facebook's dismissal of the story line by line.

(You've memorized these disclaimers by now, right? Post Co. Chairman and Chief Executive Donald E. Graham sits on Facebook's board of directors, while the newspaper and many Post staffers use Facebook for marketing purposes.)

TechCrunch's original story could yet be proved right. In a story posted Sunday night, CNet said it had heard the same story itself -- though its post noted how many Facebook projects haven't yielded shipping products.

But why would Facebook want to ship a Facebook-branded phone? Set aside the obvious jokes (to quote one Twitter comment, "it will broadcast every number dialed to all your Facebook friends"); where's the business case for it?

Such a thing is arguably unnecessary already. Beyond Facebook's smartphone-optimized Web site and its iPhone and Android applications, many Android devices already include preinstalled social-networking software to push Facebook updates to your phone's home screen and populate your contacts list with your Facebook friends. (Note that when Microsoft tried to build a line of phones even more closely linked to social networks, it gave up after less than two months.)

Even if Facebook somehow wanted to wire a phone still more tightly to its own services -- maybe as a cheap "feature phone" for the pre-paid market -- it would be a colossal waste of effort to write its own operating system. If Verizon Wireless can so thoroughly alter Google's open-source Android software that its search button brings up Microsoft's Bing search engine, it should be a lot easier to Facebook-ify Android beyond all recognition than to cook up a replacement system from scratch.

But there's also the miserable record of phones sold as extensions of a third party's service or brand. Remember the failed Helio service EarthLink and SK Telecom started up to sell phones linked to MySpace? (For that matter, anybody remember EarthLink and MySpace?) How about Mobile ESPN, which shut down in 2006 after a flurry of marketing that began with a Super Bowl ad, or Disney Mobile, which closed a year later?

I can still imagine that Facebook's executives might convince themselves that the world needs a Facebook phone. But it's a lot harder for me to imagine individual customers buying such a thing.