Facebook: The IPO That Wasn't Nor Will Be

"Facebook missed a golden opportunity for an IPO, which they may not have realized was there and won't come again for many years," Lindsay said. "In theory, the deal with Microsoft was a technical valuation, but that should've been the moment they seized the day. They had the chance but blew it. It would take something pretty spectacular to bring them back now."

With the likelihood that users will migrate way from Facebook, the same way support for MySpace faded, Lindsay says that Facebook blew their chance for massive growth. Lindsay says that as more users enter Facebook's gated community, the more likely it is that people will move on to the newest Web 2.0 product.

"There's a very strange dynamic with social networking properties where they get so large they lose their exclusivity. People start to drop out of them," Lindsay said. "Facebook is at a point that MySpace reached some time ago. Facebook is so 2007 now, and MySpace is so 2006. People are finding more exclusive ways to group together socially."

Lindsay is also quick to dismiss the importance of Apple's decision to tie its iPhoto software to Facebook. While hardware manufacturers and photography software players have discovered face recognition technology as a feature attribute, one that will help to sell cameras and photo editing software, he argues that to make a direct benefit to Facebook is overstating it.

"The new photography innovations are very helpful to the social networking players. They're definitely beneficial, but they're not transformative," he said. "It will not give them a new lease on life."