Can anyone ever imagine social networking giant Facebook "disappearing" eight years from now?
It just might happen, according to a hedge fund manager who noted Facebook‘s sliding stock price in recent weeks.
“In five to eight years, they are going to disappear in the way that Yahoo has disappeared,” tech site Mashable quoted Ironfire Capital founder Eric Jackson as saying on the CNBC show Squawk on the Street on Monday.
But Jackson qualified his definition of "disappearing" as being a shadow of its present self.
He cited the case of Yahoo, which remains profitable today but is no longer the juggernaut it was in 2000.
“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. For all intents and purposes, it’s disappeared,” he said.
Facebook stock officially went on sale on May 18 at $38 per share. It closed Monday at $26.90, Mashable said.
Mashable quoted Jackson as saying Facebook’s decline may be due to the continued emergence of the mobile web, and Facebook’s struggle to adapt to it.
This was despite Facebook having bought the popular mobile photo-sharing app Instagram for $1 billion in April.
Still, the company has acknowledged mobile as a potential stumbling block for sustained growth.
“The world is moving faster, it’s getting more competitive, not less. I think those who are dominant in their prior generation are really going to have a hard time moving into this newer generation," he said.
“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.
Problem with mobile
Mashable noted Facebook, during its required initial pre-IPO disclosure of 35 “risk factors” released in February, admitted that as mobile use of Facebook and the web in general continues to expand, its ad-free mobile platform will become more problematic.
It reiterated the challenge in an amended filing in May.
2nd of 3 generations
Mashable said Jackson saw Facebook as a member of the second of three generations of modern Internet companies.
The first generation, highlighted by businesses such as Google and Yahoo, served as portals that organized and aggregated the web’s information.
The second generation, most notably Facebook, capitalized on an emerging social web. The third generation is made up of companies whose sole goal is leveraging and monetizing mobile users.
“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.
He cited the case of Google, which is struggling to move into social. "And I think Facebook is going to have the same kind of challenges moving into mobile,” he said. — TJD/HS, GMA News
He cited the case of Google, which is struggling to move into social. "And I think Facebook is going to have the same kind of challenges moving into mobile,” he said. — TJD/HS, GMA News
source: gmanetwork.com