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Analyst: Start Thinking About Betting Against Facebook


In five to eight years they are going to disappear

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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