Facebook is aiming to become a newspaper for mobile devices

June 23, 2013, 8:26 p.m. ET

Facebook, With a Focus on Mobile, Works on Project for News Via Users

By EVELYN M. RUSLI

Facebook Inc. is aiming to become a newspaper for mobile devices.

The social network has been quietly working on a service, internally called Reader, that displays content from Facebook users and publishers in a new visual format tailored for mobile devices, people with knowledge of the matter said.The project, which the company has been developing for more than a year, is designed to showcase news content in particular. Recent versions of Reader resemble Flipboard Inc., a smartphone and tablet app that aggregates stories from multiple sources and lets users swipe to flip through articles, said the people with knowledge of the project.

While it’s unclear when Facebook will be ready to unveil the product, if it ever is, the Reader project is a sign the company is trying to get users to spend more time with it on mobile devices—and to see more ads.

A Facebook spokesman declined to comment on the company’s plans for future news applications.

Such mobile-focused endeavors are critical as Facebook tries to jump-start its sagging stock price, which remains 35% below its initial-public-offering price.

Reader also shows how Facebook, home to more than 1.1 billion users, is trying to reshape its identity.

When Mark Zuckerberg founded Facebook in 2004 as a college social network, he wanted it to be a hub for users to interact with friends and classmates. Today the service is still predominantly used by consumers to keep track, via posts and photos, of friends and family. But more recently, Facebook has pushed hard to become a destination for users’ interests—a hub where they can discover news and follow real-time events and conversations.

This month, Facebook rolled out hashtags, a feature popular on rival Twitter Inc., that lets users find public conversations based on words marked by the “#” sign.

Earlier this year, Facebook unveiled a redesign of the news-feed portion of its main Web portal that features a more prominent display of content from news publishers. At an event to unveil the redesign, Mr. Zuckerberg said he wanted Facebook to be “the best personalized newspaper in the world.”

Reading apps like Flipboard, which aggregates news from publishers and is often influenced by online connections, has become increasingly popular. Earlier this year,LinkedIn Corp. LNKD -1.92% spent roughly $90 million to acquire Pulse, another mobile news reader. In a blog post, the company said it had signed the deal, in part, to become the “definitive professional publishing platform.”

“The opportunity to own the place where people go for long-form reading is a very large opportunity, especially for advertising,” said Josh Elman, a venture capitalist at Greylock Partners who previously worked on products for Facebook and Twitter.

Although consumers are spending increasing amounts of time with mobile devices, the users of Facebook’s apps often drop in for brief sessions of just a few minutes, quickly skimming or adding posts, before jumping to the next thing, according to one of the people familiar with Facebook’s mobile efforts. A more immersive experience could open up new ad models for Facebook, which now generates about a third of its revenue from mobile.

But owning news consumption will be a challenge for Facebook, analysts say. Both Twitter and LinkedIn have been pushing their own services aggressively, while Flipboard has more than 50 million users.

“There are a lot of things people didn’t do on Facebook several years ago that they now do,” said Nate Elliot, a Forrester analyst. “But I imagine it’s going to be very hard” to retrain consumers to see Facebook as a go-to hub for news.

Mr. Zuckerberg is watching the Reader project closely, one of the people with knowledge of the matter said, and he has provided input and reviewed aspects of the design at various turns.

While Mr. Zuckerberg has made “move fast and break things” a Facebook company mantra, the development of Reader has been relatively slow and deliberate. The team has focused on creating a product experience that works on both tablets and smartphones, the person added, and it has explored different ways to highlight news content to users, including showing public posts that are trending on the site. The idea, the person said, is to create an experience that encourages users to dive deeper into content and spend more time with Facebook.

The team has thus far focused its efforts on building for Apple Inc.’s AAPL -0.81%mobile operating system to take advantage of the design elements of the iPad and iPhone devices, according to the people familiar with the project.

Michael Matas, a Facbook designer who previously worked for Apple and smart-thermostat maker Nest Labs, is a lead designer of the project, these people added. Mr. Matas didn’t respond to a request for comment.