Facebook Stock Down 32%; Site Dead by 2020?

Dennis Faas's picture

Two weeks ago, social networking site Facebook made headline news by taking its stock public. Immediately afterwards, analysts began debating whether the stock was a winner or a loser.

Now, one analyst says people should stay away from Facebook stock; in fact, he has gone so far as to suggest that the entire Facebook enterprise could disappear by the year 2020.

According to Ironfire Capital founder Eric Jackson, Facebook's difficulties in making the transition into the mobile market will prove to be its undoing.

In Facebook's place will arise entirely new companies that will succeed by more effectively melding social networking with mobile devices like smartphones and tablet computers.

It's possible that Jackson is basing his bold prediction on the trajectory of Facebook's stock, which recently closed below $26 for the first time since the firm went public at $38. That represents a decline in value of 32 per cent.

Facebook: The New AOL?

In a recent interview with CNBC, Jackson predicted that Facebook would carry no more sway in a few years' time than Yahoo or America Online (AOL) does today.

Both of those companies were big players ten years ago but have relatively little influence on the technology market today.

"In five to eight years [Facebook is] going to disappear in the way that Yahoo has disappeared," Jackson said.

"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 added. (Source: nydailynews.com)

Analyst Jackson: Facebook a "Big, Fat Website"

Simply put, Jackson believes Facebook just isn't adapting fast enough to changing conditions in the technology market. In his estimation, such problems mean the site will be dead in the water in just eight years' time. (Source: digitaltrends.com)

"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," Jackson 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." (Source: nydailynews.com)

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