A prominent financial analyst says he believes Facebook will lose most of its relevance in less than a decade.
According to Eric Jackson, founder of Ironfire Capital, the wildly popular social networking platform will “disappear” much like Yahoo in 5-8 years.
“Yahoo is still making money, it’s still profitable, still has 13,000 employees working for it, but it’s 10 percent of the value that it was at the height of 2000,” Jackson told CNBC’s Squawk on the Street.
“[So] for all intents and purposes, it’s disappeared.”
Jackson also noted that there are currently three distinct generation of web companies: Big web portals for aggregating content in a single location, the social web dominated by Facebook, and companies focused entirely on monetizing a mobile platform.
“When you look over these three generations, no matter how successful you are in one generation, you don’t seem to be able to translate that into success in the second generation, no matter how much money you have in the bank, no matter how many smart PhDs you have working for you,” Jackson said.
“Look at how Google has struggled moving into social, and I think Facebook is going to have the same kind of challenges moving into mobile.”
Jackson’s assessment of Facebook’s long-term future was publicized in the aftermath of the social networking site’s plummeting stock prices, which has decreased approximately 27% from its original IPO price of $38 a share.
“The world is moving faster, it’s getting more competitive, not less, and I think those who are dominant in their prior generation are really going to have a hard time moving into this newer generation… Facebook can buy a bunch of mobile companies, but they are still a big, fat website and that’s different from a mobile app,” he added.
