Analyst: Start Thinking About Betting Against Facebook
- Posted on June 6, 2012 at 10:56pm by
Becket Adams
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During a phone interview on CNBC’s “Squawk on the Street” on Monday, Eric Jackson, founder of Ironfire Capital, made a startling (yet believable) prediction: Facebook will cease to be a dominant web company in about 10 years.
“In five to eight years they are 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.
According to Jackson, there have been three generations of web companies. The first generation was made up of major “web portals” (like Yahoo!) with all content aggregated in one spot. The second generation was comprised of social networking sites (like Facebook). The third generation, which is still evolving, consists of companies that focus exclusively on the mobile platforms — something Facebook has yet to capitalize on, according to Jackson.
Watch the CNBC interview here:
“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,” he added.
Facebook revealed last month in a regulatory filing that it was struggling to capitalize on mobile platforms.
“The company stated that the growing number of mobile users using Facebook is hard to monetize and ‘may negatively affect our revenue and financial results,’” CNBC’s Cadie Thompson writes.
Jackson may not be too far off. Keep in mind Facebook has suffered the biggest two-week loss of any IPO in 17 years (down 27 percent from its initial IPO price of $38 a share).
Facebook stock quote as of June 6, 2012.
“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,” 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.”
(H/T: HuffPo)
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Comments (65)
MachIV
Posted on June 7, 2012 at 7:39amThe whole concept of Facebook flies right in the face of everything I ever understood as safe protocal on the internet back in the 1990s. You operate ONLY under pseudo-screen names on chat rooms and message boards and NEVER, I repeat NEVER EVER give out your real name or address.
Report Post »TAXEVERYONE
Posted on June 7, 2012 at 9:05amThe kid and the other senior executives were able to sell their shares for billions and get out letting all the fools who bought during the IPO holding the bag.
Report Post »midwesthippie
Posted on June 7, 2012 at 10:29am…yup…the IPO was by design a sucker’s bet…
Report Post »guitarspook
Posted on June 7, 2012 at 11:17amI called this before the IPO. Not sure why anyone would invest in over-inflated garbage. BTW, VectorVest’s system values facebook at about $8.00. Sorry suckers….hook, line and sinker with people’s retirement so a few crooks could make it big.
Report Post »huey6367
Posted on June 7, 2012 at 7:29amI have always assumed it would not be as dominant in the future as itis today. Remember MySpace? Still around but no one talks about it.
Report Post »Dougral Supports Israel
Posted on June 7, 2012 at 6:40amThe problem that companies like Facebook have is that they are very dependent on the “cool factor”. People flocked to Facebook because it was the “in thing” to do. Someday something will come along that will start attracting lots of interest and Facebook will begin its decline. Its inevitable.
Report Post »THXll38
Posted on June 7, 2012 at 6:36amI can almost hear my 4 year old when he becomes a teenager . . . Facebook . . . I read about that on Wikipedia.
Report Post »JQCitizen
Posted on June 7, 2012 at 5:15amI think the best way to use FB is to use it to communicate with your REAL FRIENDS! I know people who have hundreds of FB friends, but I can’t do that any better than I could when I WAS in highschool:) It serves as a GREAT way to share prayer requests among family and friends at church, or to write encouraging notes to others.
Its pretty much like any technology platform; Its a tool, and its value is ALL in how you use it!!!
Report Post »hemi49er
Posted on June 7, 2012 at 4:01amFacebook is kind of a bad online version of high school. And as such, most of us hate it, and grudgingly look at it from time to time to see if something interesting is going on, which it rarely is.
Kids have already migrated to twitter and mobile, and I would guess that other than granny posting their family pictures and bands / promoters / retailers desperately trying to sell their tickets and products, FB is already done.
Report Post »Mr.Fitnah
Posted on June 7, 2012 at 3:35am3 years.
Report Post »5 years is generations on the web.
RamonPreston
Posted on June 7, 2012 at 3:33amHe really thinks that it will take people that long to figure out Facebook is in cahoots with the CIA? You don’t have to be stupid to use Facebook but it helps.
Report Post »RamonPreston
Posted on June 7, 2012 at 3:42amWatch this http://www.youtube.com/watch?v=3sThcwmx3rs&feature=related
Report Post »JediKnight
Posted on June 7, 2012 at 2:56amThis guy is kind of a loon. He compares Facebook to Yahoo and then talks about Google having trouble in social. What he’s forgetting is that his prediction has already come true, just not with Facebook. MySpace was once the big thing and it has gone away. No one talks about MySpace anymore just like hardly anyone uses Yahoo! anymore.
Google and Facebook have essentially taken over where Yahoo and MySpace once dominated.
Additionally, maybe the author should have been a little more clear. Facebook is having trouble monetizing mobile users right now. Oh, except that they just bought Instagram (I‘m pretty sure that’s the one) and there’s another small company out there that specializes in pushing ads to mobile devices. Hmm, I wonder what Facebook might do. Maybe buy that company?
Report Post »Diane TX
Posted on June 7, 2012 at 1:58amFacebook will go the way of AOL. Everyone “used” to have AOL email addresses, but then AOL added so much junk, it took ten minutes just to boot it up. I haven’t used AOL in years, and while I have a Facebook page, it has been more than a year since I signed on. I really don’t care how many “friends” I have or don’t have. Facebook is for kids.
Report Post »JediKnight
Posted on June 7, 2012 at 3:00amI had AOL for maybe a month. Never used the email address for anything. Got rid of it long before it got inundated with ads.
I know a lot of people used AOL for a very long time. But a lot of people do a lot of stupid things too. I had a dial up account that didn’t use a lame interface or try to make me use a lame browser. Didn’t need AOL for anything.
I know a lot of people had AOL, but I also know that a lot of people got rid of AOL as they started getting DSL and cable modems. AOL disappeared because they tried to hang on to their lame interface and rebrand themselves as a broadband company for so long. They should’ve just become a portal and ditched the “login” screen. I think they finally did, but not until after it was obvious that they weren’t getting anywhere.
Facebook is constantly adding new features and redesigning the interface. Facebook was also started by people that likely loathed AOL and know not to make the same mistakes. So it’s just not comparable.
Report Post »RamonPreston
Posted on June 7, 2012 at 3:41amNo, Facebook is for the CIA. You NEED to watch this!
Report Post »http://www.youtube.com/watch?v=3sThcwmx3rs&feature=related
Jaycen
Posted on June 7, 2012 at 1:44amDuh. Most people don’t “Facebook” on the go. They sit on their fat butts, telling their girlfriends and family members all the trite things that happened to them. They share pictures. It requires constant focus….that’s why your loved ones disappear into Facebook for hours at a time.
You can’t really do that in Mobile. You shouldn’t, since you’re probably walking or driving. That would be dangerously stupid.
And if you’re going to sit down and concentrate that long anyway, why bother doing it away from the comfort of your desktop and home? Why’d you bother to go outside in the first place? Your farther away from the fridge and that comfy office chair.
Report Post »JediKnight
Posted on June 7, 2012 at 3:03amAre you serious? You’ve apparently never bothered to use facebook on a mobile device. It takes a few seconds to make a status update. Even less time to share a photo, unless you want to comment on it, but then you’re back to the same amount of time. You act like you have to stare at your phone for 30 mins at a time in order to use FB on a mobile device and that just isn’t the case. Most people don’t sit and wait for comments to roll in (maybe that‘s what you’re doing), they just post a status update and move on.
Having FB on my mobile phone was a godsend. It freed me from having to be at my desktop to post something. I could post a picture of a flower from the front yard without having to get a camera, download the pic, and then upload to fb.
Report Post »Meyvn
Posted on June 7, 2012 at 7:09am@JediKnight: A godsend? Really? I’ve yet to have the need to post a flower to any medium. If my employer didn‘t require I have a mobile device I wouldn’t have one at all. Real whips Virtual every time. Keep it real if you can.
Report Post »sillyfreshness
Posted on June 7, 2012 at 1:36amFinally some good news! I hate Facebook and would love to see it go under. Why do I hate FB? Well for starters it’s a really dumb name. The name is actually annoying….you almost need to say it with a lisp. Second, it’s a government agent sharing information about you to the government. It’s a voluntary spying network for the government. Third, everyone is on Facebook and if EVERYONE is on it, then that is a red flag. Since when do all, and I mean all, private corporations have an account with a private company like Facebook? Every company out there has a Facebook account. I have never seen anything like it before. Many don’t even have their own websites anymore, they just have FB. These companies say “or check us out on the web at FB.com/xxxxx That is concerning to me that just about everyone on the planet is on this one website. My local news has “pick your news tonight” by going to their FB page and picking what story you want them to choose from. Why not use their own website to pick your news instead of using FB? When everyone is on the “must have” fad, you should go the opposite way. So I hope FB does go under. I never did like Facebook-stupid name and all.
Report Post »JediKnight
Posted on June 7, 2012 at 2:53amEveryone has an email address. Does that mean email needs to go away too? Most people have bank accounts, I suppose those should go away. Everyone has a computer, maybe we should do away with those too.
Please gimme a break. Replace Facebook in your comment with just about anything else (cars, TVs, refrigerators, etc). If you really think that it needs to go away because “everyone is on it”, then you’re just a fool.
Report Post »RamonPreston
Posted on June 7, 2012 at 4:01amJediKnight
Report Post »Your car and refrigerator don’t spy on you. Adolf Hitler would have loved to have had Facebook. It would have been far more efficient that his intelligence gathering operation. Watch the video I have posted above.
Wat Tyler
Posted on June 7, 2012 at 3:01pmFacebook = Vast government intelligence database.
Report Post »sillyfreshness
Posted on June 7, 2012 at 10:14pmJediknight, you really sound dense. I’m not talking about “generic” things like email or cars or bank accounts in general. I’m talking about a specific item like Facebook. Facebook is like a monopoly in that everyone wants to be on it. So if there was only one email service in the world like Hotmail and everybody and their brother was talking about Hotmail, then yes, I’d have a problem with that too. You need to go back for more training Jedi. You aren’t ready to face the world yet.
Report Post »maxwillson1
Posted on June 7, 2012 at 1:35amEveryone on Facebook ignores me because I started to shared Glenn Beck videos, oh well I actually like living a life without Facebook, thanks Glenn Beck! ahahaha.
Report Post »JediKnight
Posted on June 7, 2012 at 3:05amKeep sharing them. I share all kinds of political and other news. I don’t care if people ignore it. At least this way, if things get real bad, I can say “Did you read even half of what I’ve been posting for the last year?”
Report Post »rickc34
Posted on June 7, 2012 at 12:41amOnly an idiot would post all their info online and only a bigger one would invest in facebook.
Report Post »RepubliCorp
Posted on June 7, 2012 at 4:01amagree and only fools would let every pervert with a computer peek into their life. I have never been on facebook and never will be. And now that they have pulled off a bernie madoff people should realize how fast they would throw you under the bus to the highest bidder.
Report Post »lukerw
Posted on June 7, 2012 at 12:01amFB is a FAD… will last as long as Bell Bottom Pants… and wil give as much Value.
Report Post »poweruser19
Posted on June 6, 2012 at 11:59pmWhat Facebook makes is a whole generation of fat people that give away their personal info to anybody that wants it Ie. the government, corporations, crooks and stalkers………….
Report Post »nobull14
Posted on June 6, 2012 at 11:51pmLets face it most people on face book tell lies about how great there life’s are ? Put pictures that are not true . When you think about it all facebook is is one room with some computer server in it ? Too think its worth more than GM or ford motor company you have to be insane!!!!!.
Report Post »Calm Voice of Reason
Posted on June 7, 2012 at 12:20am@No Bull: More like several rooms with many, many, many computer servers. The value of their actual, physical assets isn’t really that much; it’s high-end equipment and lots of it, sure, but that isn’t the point. Facebook has a global audience that is connected day and night. It’s not accurate to compare them to GM, better to think of them as a television network and you are a little closer to the mark, but even that doesn‘t quite cover FB’s value to the Information Industry. There’s a lot of worth in that company still, and I would not bet against them anytime soon.
Report Post »godhatesacoward
Posted on June 7, 2012 at 12:46amAh.. pictures are just that. Proof of the stupid.
Report Post »TunaBlue
Posted on June 7, 2012 at 1:33amThere’s a buy in my future, but we won’t see the bottom for a while. I think this might be worth riding back up to 30+. For now, I’m on the side.
Report Post »oicu814me2
Posted on June 6, 2012 at 11:36pma friend of mine bought 170 shares at the peak price. they asked me if i wanted in on it. I said no thank you. i have my own business and i buy into my own company. my return is about 500% to 1000% with some labor. the worst i have ever done is dubble my money in a few weeks. i actually make a product that people need and pay money for. I just dont see how internet vapor can be worth more that a car company. I look at it like this.. if facebook filed bankuptcy and sold there inventory and equpment what would you have?? if a car company filed bankruptcy and sold out look at all the equipment you would have. the value of facebook is a scam and is worth what some people will pay for it at the time. that can not last
Report Post »JakeEllis
Posted on June 6, 2012 at 11:54pmI hope your business does better than your spell check. Failure if thats the case.
Report Post »nobull14
Posted on June 7, 2012 at 12:05amJakeellis your a moron I might not be the best speller !!! But I am retired at 54 How about you Big mouth
Report Post »Calm Voice of Reason
Posted on June 7, 2012 at 12:09amWhy would a person buy something at it’s peak price? By definition, you can only lose your investment.
Report Post »JediKnight
Posted on June 7, 2012 at 2:51amAre you serious? What would the buyers have if FB went bankrupt and sold off the equipment? Servers, workstations, printers, copiers, etc. You name it, if it’s in an office, FB probably has far more of them. Or do you really think all that data is just “out there” somewhere.
The way people diss Internet companies around here, you’d think none of you use the Internet ever. Email, phones (yes, even if you have a POTS line, at some point it hooks into the Internet), websites. All that stuff is controlled essentially by software these days.
Report Post »oicu814me2
Posted on June 7, 2012 at 8:50amWOW. servers , printers, light bulbs.. thats not even close to a car company.
Report Post »freedom_gurl35
Posted on June 7, 2012 at 11:23am@Jediknight: Selling off furniture, office equipment, servers, and computer equipment to pay off buyers isn’t the same thing as having a tangible, marketable product. What does FB offer that enables the company to make a profit?
Report Post »Ruckus_Tom
Posted on June 6, 2012 at 11:31pmEmail (e.g. Yahoo), web pages (e.g. Facebook – anyone still use MySpace?) and mobile. That’s evolution.
Combining cable and mobile and voice recognition / activation and electricity is next. All to be controlled by one mobile device. Just plug it into the wall when you get home from work and enjoy. “TV Turn On, channel 205″; “A/C – set the temperature to 72″; “microwave – set to 5 minutes and start”).
It’s probably already here. Welcome to Star Trek.
If the switch goes off, we’re down a creek without a paddle.
Report Post »JediKnight
Posted on June 7, 2012 at 3:07amYou can control your TV with an iPhone if you have the right app. You can control your computer too, just install an app on the iPhone and one on the PC. I looked for them because I thought “I wonder if I can…” That is what sparks the next wave of innovation every time.
Report Post »taxpro4u03
Posted on June 7, 2012 at 7:19amYassuh – we already up **** creek – idk ppl cn actually ‘interface’ w/o txtng etc… Social skills are Soooo inept – TRY to have a coherent conversation with people in the same room (NOT using an electronic piece of garbage…) and you find we’re idiots… from the HIGHEST political offices, businesses, right on down to the kiddies in skool. Back to the Future – Marty McFly –
Report Post »BTW, me thinks that is the INTENT, to get the world ‘wired, (least the usa) — Nikola Tesla did good. :-) Technology is great, but I believe one MUST have hardcopies (physical as opposed to ‘virtual vapor’) of EVERYthing of value. Photoshopped ‘pics,’ EDITED vids (yeah it MUST be real — I saw the vid on teevee) -
One EMP and everything from pacemakers, microwaves, ‘credit/debit’ cards,planes trains and automobiles – kaPut – :-) Most would starve; no skills to hook a fish, identify non-Monsato-GM wild game/nuts and berries, let alone the ability to build a fire to roast it. :-) By design — JUST like the ‘idea’ that a ‘job’ is required for any quality of life. False. Ask any native American… “A Countryboy Can Survive…” :-)
mharry860
Posted on June 6, 2012 at 11:27pmAdam Curry on TWIT 2 weeks ago pegged this perfectly, $15.00 in 5 months, irrelevant in 5 years.
Report Post »RightPolitically
Posted on June 6, 2012 at 11:22pmI think he’s right. Lot’s of people have Facebook fatigue. Many will bail from them and some of the other social media sites. Twitter might survive because it remains “short and sweet.”
Report Post »copatriots
Posted on June 6, 2012 at 11:08pmThe fact that anyone provides so much personal information to a company led by Zucker much less invested in it’s IPO is mind numbing.
Report Post »NancyBee
Posted on June 7, 2012 at 12:22amI agree
Report Post »VotersOfNY
Posted on June 6, 2012 at 11:08pmWhat do they make? I just can‘t invest in a company that doesn’t make something.
Report Post »Calm Voice of Reason
Posted on June 6, 2012 at 11:22pmThey sell eyeballs. There’s a saying, “When you get something for free, you aren’t the customer, you are the product being sold.”
Report Post »SUNTZU
Posted on June 6, 2012 at 11:42pmThey make ZOMBIES.
Report Post »MODEL82A1
Posted on June 6, 2012 at 11:06pm“Start” thinking about shorting Facebook? Lol!
Report Post »Maxim Crux
Posted on June 6, 2012 at 11:06pmI put my money on getting a piece of paper, grabbing a pen and writing something meaningful in which someone can hold in their hand, feel with their fingers, smell the parchment and know it is something personal and real!
Report Post »godhatesacoward
Posted on June 7, 2012 at 12:37amCompletely agree brother!
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