Even before Google announced their decision to shut down Google Reader, Facebook was already hard at work developing a Flipboard-style news reader, according to a new report.

The Wall Street Journal says that Facebook has called the product “Reader” internally, and they’ve been working on it for over a year.

From the WSJ:

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.

This is actually not the first time we’ve heard of a Facebook reader of sorts – it’s sort of secondary confirmation. Earlier this month, a developer who closely watches changes in Facebook code discovered some new mentions of RSS feeds thrown in there.

As Tom Waddington described it:

A new entry appeared – now users have RSS feeds, each RSS feed has multiple entries, and a list of subscribers. What’s surprising is that the code mentions RSS specifically, and distinctly from existing interest lists and friend lists. Also, note that this is unconnected to Facebook outputting RSS feeds, which they’ve done for a while.

So it is looking more and more like this visual, Flipboard-style Facebook Reader is actually a real thing. There’s not word on Facebook’s timetable for launch – if there even is one. But it looks like it may be there, in the works.

If Facebook unveils this new product, it’s going to face competition from existing readers, as well as new breaks into the crowded space from the likes of Digg and AOL. But Facebook could have a huge advantage over those companies – considering how they could integrate their massive user graph into a new reader to make it more social than anyone else possibly could. It’ll be interesting to see how a Facebook Reader plays with the rest of Facebook – you can bet they will be more than friends.