Money Matters - Simplified

Facebook will “disappear” in next 5 to 8 years

Facebook’s power may erode by the end of the decade given the site’s inability to capitalize of mobile apps with agility.

Looking at the ubiquitous nature and the immense popularity of Facebook, one would imagine that the world’s largest social networking site would remain at the numero uno position for a long time to come.

However, there are experts who believe that the opposite end of the spectrum is true.

Will go the Yahoo Way
These experts opine that the future for Facebook is going to be tortuous and that the site would “disappear in the next five to eight years’, pretty much the same way as Yahoo did.

Ironfire Capital founder Eric Jackson, speaking at the CNBC show Squawk on the Street said, “Yahoo is still making money, it's still profitable, still has 13,000 employees working for it, but it's 10 per cent of the value that it was at the height of 2000.”

Jackson thus argues that Yahoo is no longer as strong as it was a decade ago and therefore it has disappeared for “all intents and purposes.”

Mobile Apps: The new Paradigm

Jackson opines that the continued emergence of the mobile web would prove to be the nemesis of Facebook. He considers that Facebook is essentially a “big, fat website and that's different from a mobile app.”

“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,” Jackson said.

Facebook’s inability to find its feet in the new scheme of things, mobile apps, will ultimately turn the present day behemoth into an ‘also ran’ business set up after a few years.

The Palo Alto, California based company is wary of the changing business environment and the risk that this environment poses on its future prosperity and survival.

The company, in its pre-IPO disclosure of ‘risk factors’, made public in February this year, acknowledged that the mobile use of Facebook and its ad-free mobile platform will pose problems.