Analyst Predicts the Demise of Facebook in the Next 10 Years

Monitors show the value of the Facebook, Inc. stock during morning trading at the NASDAQ Marketsite in New York June 4, 2012. (Photo : REUTERS/Eric Thaye)

On Monday, Eric Jackson, founder of Ironfire Capital, stated that that Facebook will lose its dominance as a social network in less than ten years.

In his forecast, Jackson cited Facebook's inability to crack the mobile market and the stock's 27 percent decrease since the company's IPO.

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"In five to eight years they are going to disappear in the way that Yahoo has disappeared," Jackson stated. "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."

According to Jackson, there have been three distinct generations of web companies. First were the big web portals like Yahoo. The following generation was the rise of social media with Facebook. Jackson believes the third is mobile web and he believes Facebook will be unable to adapt much in the same way Google has failed to adapt to social networking. MySpace, the social networking site which once dominated the web, has essentially become a non-entity with the rise of Facebook.

A recent poll from Reuters and Ipsos found that 34 percent of Facebook users hop onto the site less frequently than they did six months ago. But almost half spend around the same amount of time, and 20 percent are spending more time.

Mobile technology has become a problem for Facebook as the company has barely made any money off of mobile advertising. On Tuesday, the company announced a new mobile advertising plan aimed to attract more advertisers and increase its revenue.

Negativity has surrounded the company ever since it went public over a month ago. Major advertisers, such as General Motors, have expressed concern and frustration with the company. GM recently said it would pull around $10 million in advertising from the social network, claiming the ads were not working.

A Reuters/Ipsos poll released on Monday found that eight percent of Facebook users have never been influenced to purchase a product or service as a result of advertising or comments on the site.

Facebook's IPO was marred by technical glitches on the Nasdaq Trading and the company which opened with an asking price of $38 per share has since plummeted to under $26 a share. Its $100 billion value, the largest ever for an opening, has fallen to $71 billion. The company is also in the middle of a lawsuit from its investors that accuse Facebook and its underwriters of withholding forecasts about the company's IPO to the general investing community and only releasing the information to preferred investors.