UPDATE 12:35pm: The following information has been confirmed from additional sources inside both Facebook and Verizon Wireless, who recently broke off talks regarding a carrier agreement.

Could we soon really see the fPhone? About eight months ago, two friends of mine, both senior hardware engineers from Apple who worked on the development of the iPhone, made a conspicuous job change to Facebook. I couldn’t help but notice the coincidence and wondered at the time whether or not Facebook was planning on launching their own phone. After all, back then it seemed everyone was trying to catch up with Apple (remember the rumored gPhone?). Well, after eight months of wondering, I finally got a big break last night when one of my sources(who will remain nameless) couldn’t help but gush about his excitement about the new “Facebook phone”, set to be announced Monday May 12th.

I couldn’t get many details from him, except for the three features he was extremely excited about:

• The setup process. “You turn it on the first time and login. That’s it. All your contacts and phone numbers appear right away.”
• Seamless interaction between the website and phone. It’s apparently dead simple to message with people on the computer and there is LIVE VIDEO!! so a friend at a computer can request you to broadcast to them(not sure if they use uStream or Justin.tv or their own software). Also this confirms there is a camera.
• Multi-person use. Hitting the “Switch User” button on the home screen allows someone else to login and use your phone. Need to call someone from your friend’s phone but forget the number? Now you can instantly login to your friends phone and all of your contacts appear. When you logout, they’re gone. Not sure who pays for the call :).

It sounds pretty sweet. I seriously doubt my source made this up–Zuckerberg doesn’t have as zealous an enforcement of secrecy as Jobs and I’ve never once heard this friend say anything that wasn’t true. If I can get any more details or confirmation I’ll update this immediately.