Updated 19 May, 2013, 5:16 pm IST
Facebook has only five to eight years to live, analyst says
| by Padmini Harchandrai |
You would think with how ubiquitous Facebook is becoming that they would last more than at least the next ten years, but one analyst opines differently. Eric Jackson, the founder of Ironfire Capital told a CNBC show, Squawk on the Street that he thinks the social network will disappear in the next five to eight years. He said, "In five to eight years they are going to disappear in the way that Yahoo has disappeared. Yahoo is still making money, it’s still profitable, still has 13,000 employees working for it, but it’s 10% of the value that it was at the height of 2000. For all intents and purposes, it’s disappeared." Jackson says this in response to the disappointing IPO that Facebook had recently.
According to Mashable, Jackson says that the shift of consumer behaviour to the mobile web and Facebook's lack of acceptance of that way of thinking will result in their demise. He says that as we move forward in time, the world is getting more competitive, not less. He adds that those companies that were dominant in a previous generation will find a hard time surviving in the new generation. He said that while Facebook can buy all the mobile applications they want, they will still be a giant website.
Facebook's down in 2020?
Jackson explains his theory of three Internet generations, explaining that Facebook is a member of the second generation. The first generation comprises of companies like Google and Yahoo!, that essentially served as portals to aggregate and organize all the information that was available on the Internet. The second generation is dominated by Facebook and is essentially comprises companies whose aim was to capitalize on the social web. Finally, the third generation includes companies that monetize from mobile web users.
Jackson explains that no matter how successful a company is in one generation, they will have trouble translating their services into another generation. He provides the example of Google, which dominated the first generation, but could not succeed in the social generation. In a similar fashion, Facebook will have trouble moving in to the mobile generation. Facebook has already received flak from potential shareholders, right before the IPO, that their mobile interfaces are free of ads and therefore have no revenue stream. Jackson says that it is this inability, which will make Facebook disappear in the next five to eight years.
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