Facebook is now partnering with HTC to build an Android-based phone — code-named “Buffy” — around its own social operating system platform, as we reported yesterday.

But hasn’t Facebook been working on this phone thing for a long time?

This was the response from many people who track the company and recall the first reports about such a project from TechCrunch and Business Insider last September, as well as the bits and pieces that have cropped up since then.

The answer is complex, as Facebook’s original phone effort was stillborn.

About a year and a half ago, a Facebook mobile special ops team was formed, with its own building separate from the rest of the company. The workspace was accessible by keycard only to people intimately involved in the effort.

This Facebook team was indeed trying to build a phone – really build a phone — much as Apple did, with integrated hardware and software.

But when the project became too big and too political and different from where it started, many of the people involved left the company or went on extended leaves of absence, and the effort was shelved.

But the new effort had its origins in the first — including its code name, Buffy.

The first Facebook phone project was called the “Social Layer,” which was then shortened to “Slayer,” a sly mashup of the phrase.

But that was deemed too violent, and the gentler Buffy was chosen — after the popular television vampire slayer.

The team working on Slayer/Buffy included its leader, Chamath Palihapitiya, as well as Firefox founder and Facebook iPhone app creator Joe Hewitt, Google Chrome OS creator Matt Papakipos, biz dev exec Priti Choksi, developer Zhen Fang and designer Matt Cahill.

This was an exclusive and handpicked group, which generated awkwardness within Facebook’s flat organization.

That’s because Facebook has historically only ever made one product — its social platform. To have a secret team operating out of a separate building drew a lot of interest and also jealousy from other employees, multiple sources said.

The Slayers were working on everything from industrial design to carrier subsidies in order to build the ultimate Facebook phone. They had discussions with potential partners such as AT&T and Intel, sources said.

But, as often happens in ambitious efforts like this, the project quickly spiraled out of Facebook’s expertise and into budgets that were impossible without an IPO or perhaps a billion-dollar fund raising.

With its horizon more limited, those involved — many of them longtime Facebook employees — lost faith amid power struggles and a growing concern that they wouldn’t have the leeway to create something that could truly compete with Apple’s iPhone.

So the team scaled back and looked at building on top of Android. Soon many of them ended up quitting Facebook altogether.

Palihapitiya, for instance, founded his own venture capital firm in June, while Hewitt left Facebook in May to work on his own projects.

Thus the first version of Buffy was slain, until it recently got new life under Facebook CTO Bret Taylor. A source familiar with the older version of the project said the company “undid and then remade” the decision to make an Android-based phone emphasizing HTML5.

A spokesman for Facebook declined to comment on Buffy directly, but told AllThingsD:

“Our mobile strategy is simple: We think every mobile device is better if it is deeply social. We’re working across the entire mobile industry; with operators, hardware manufacturers, OS providers, and application developers to bring powerful social experiences to more people around the world.”

HTC also declined to comment.

But, said multiple sources, that’s where we are today, with an HTC-made Facebook phone being prepared for release in the next year and a half.

Rest in pieces, Slayer.

Related Posts on the Facebook Phone:

1. It’s Finally Real and Its Name Is Buffy
2. Forking Android Offers Both Promise and Pitfalls
3. The “Slayer” That Wasn’t
4. If It Comes, Will It Already Be Too Late?
5. The Facebook Phone: Why Would You Want One?

Full Facebook Phone Coverage »

Please see the disclosure about Facebook in my ethics statement.

Bret Taylor

But there’s also a pattern emerging for what happens to that talent once folks arrive at Facebook. Acqhired CEOs hold prominent roles on Facebook’s product team; nearly every recent Facebook product launch seems to have been led by an acqhired employee. Most recently, Facebook Messages was product-managed by Dan Hsiao, who joined the company with the FriendFeed acquisition. Hsiao had actually been a more junior member of the FriendFeed team, having started there as an intern in 2008. Now he is managing what Facebook called the largest engineering team it has ever put together for a launch.

Meanwhile, former FriendFeed CEO Bret Taylor is CTO of Facebook. Hot Potato CEO Justin Shaffer was product manager for Facebook Groups and is now product manager for the company’s Places and Events products (his company was only acquired in August). Divvyshot CEO Sam Odio is now product manager for Facebook Photos. Nextstop CEO Carl Sjogreen now holds the title “head of platform development,” according to a Facebook spokeperson.

And Gokul Rajaram, known for his seminal work as a product manager on Google AdSense, is now in charge of Facebook’s ad technology. Rajaram came to Facebook through the acquisition of his company Chai Labs, also last August. Multiple sources confirmed Rajaram’s role at Facebook, though Facebook declined to.

Gokul Rajaram

Facebook has its reasons for keeping a big-name hire like Rajaram under the radar; for one, Google can’t be happy to have lost the opportunity to buy his start-up. The former Googler has been an adviser and director to multiple companies, including Canoe Ventures and Associated Content.

Elsewhere, Blake Ross and Joe Hewitt from Facebook’s first acquisition, Parakey, have had significant roles on products like Facebook Questions and the Facebook iPhone app. Ross’s title is Director of Product, though he is currently on sabbatical. Hewitt is working on undisclosed projects but “more on the engineering side,” said the spokesperson.

Facebook is not yet talking about where it will assign Sam Lessin, CEO of the just-acquired storage start-up Drop.io, and Cory Ondrejka and Bruce Rogers, founders of the just-acquired gaming start-up Walletin.

Facebook says it has about “two dozen PMs,” so the acqhired folks account for a significant but not dominant portion of that corps.

Facebook CEO Mark Zuckerberg told me last month:

We have a big footprint but we want to operate like a startup and take risks, and the best way to do that is to get people who self-select towards being entrepreneurs… The only real theme is that we haven’t bought any companies yet to get the company. It’s always been because we have a lot of respect for the people involved.

This kind of track record may make Facebook an even more enticing acquirer for small start-ups. On the other hand, it’s probably disheartening for Facebook’s homegrown talent to see these opportunities handed to people who are brand-new and who, in many cases, have little experience working at the scale of hundreds of millions of users.

*Facebook has also explored larger acquisitions of companies like Twitter and Foursquare (though Kara Swisher reported those talks were less serious than portrayed elsewhere), but those deals were never consummated.

Please see the disclosure about Facebook in my ethics statement.

Bret Taylor photo (CC) Brian Solis.

“Blake and Joe built the Firefox Web browser and then turned to the developer community to build on top of the foundation they’d established, not unlike what we’ve done with Facebook Platform,” said Facebook CEO Mark Zuckerberg. “The work they’ve done with Firefox and Parakey and their approach to building products fit right in at Facebook.”

I guess they must. Facebook describes Parakey’s technology as a platform “bridging the gap between information on the Web and the desktop.” Which should go quite well with Facebook’s platform of “bridging the gap between Friendster (or TheGlobe.com) and a successful multibillion-dollar exit plan.”

“Blake and Joe built the Firefox Web browser and then turned to the developer community to build on top of the foundation they’d established, not unlike what we’ve done with Facebook Platform,” said Facebook CEO Mark Zuckerberg. “The work they’ve done with Firefox and Parakey and their approach to building products fit right in at Facebook.”

I guess they must. Facebook describes Parakey’s technology as a platform “bridging the gap between information on the Web and the desktop.” Which should go quite well with Facebook’s platform of “bridging the gap between Friendster (or TheGlobe.com) and a successful multibillion-dollar exit plan.”