Hedge fund manager Eric Jackson stated on CNBC's Squawk on the Street that in the next five to eight years Facebook Inc (NASDAQ:FB) may disappear just like Yahoo! Inc. (NASDAQ:YHOO) has 'disappeared.'
"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." Jackson does mention that his prediction about Facebook is a shadow of the company's present self.
The chairman of Ironfire Capital says Facebook's power may erode due to the continued emergence of mobile web, and the company's struggle to adapt to it. Facebook IPO was launched on May 18 at $38 per share. But it has fallen almost 28% to $26.90 today.
Jackson identifies three generations of Internet companies. The first generation, dominated by Google and Yahoo, served as web portals that aggregated content on one place. The second generation belongs to social media networking, which is obviously ruled by Facebook. And the third generation is comprised of companies that monetize the mobile platforms.
“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. "Facebook can buy a bunch of mobile companies, but they are still a big, fat website and that’s different from a mobile app.”
Facebook acknowledged its challenge to monetize the mobile platforms in a regulatory filing. The company stated, "It may negatively affect our revenue and financial results."
Jackson also cited the example of Google, which is struggling to move into social media.