From MIT Technology Review,
The Facebook Fallacy
For all its valuation, the social network is just another ad-supported site. Without an earth-changing idea, it will collapse and take down the Web.
The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.