meh insideThe good news about Facebook is that it is, once again, destined for great things. Which is unfortunate. Because the bad news about Facebook is that it’s dying.

More than most tech companies, Facebook inspires optimism as well as dread, addiction as well as loathing – sometimes all of these within a single heart. When it comes to talking about Facebook’s future, that ambivalence seems to split into even more polarized narratives: It’s over; it’s only just begun.

A lot of the optimism surrounding Facebook is coming from Wall Street. After free-falling in the wake of a messy IPO, Facebook has staged a five-month, 63-percent rally. That has inspired Wall Street firms to dust off the bullish arguments they had about Facebook immediately after its IPO. As if they were conspiracy theories that events were finally validating.

In the past month, at least three analysts have boosted their price targets on Facebook to $38 a share. I’m skeptical, if only for liquidity reasons. Investors who bought shares on private secondary markets will sell as the stock rises toward its IPO offering price, smothering many future rallies. But the herd of Facebook bulls is growing. One longtime Wall Street observer called Facebook a “must-buy stock.” None of this optimism is due to Facebook being a screaming bargain. It’s trading at 54 times its estimated 2013 earnings.

Using Facebook’s stock as a gauge of the company’s current success, of course, is not terribly useful. The company’s market cap has swung from $50 billion five months ago to $88 billion this month, while the underlying business has changed little. You might as well point to a correlation between Facebook’s growth and Greek bond yields and blame Facebook for the Greek debt crisis.

Anyone who argues Facebook will return to the 12-digit valuation it had a year ago is necessarily expecting some pretty huge growth ahead. As Shawn Tully at Fortune pointed out, at $28 a share Facebook is priced to show 31-percent annual earnings growth over the next decade – more than twice the 13-percent growth rate it’s seen recently.

On the other hand, there are others who are saying that Facebook is over or dying. Or more commonly, they ask whether it’s over or dying. This is how people float new memes, by attaching a question mark on the end of their thesis and hoping it will eventually fall off. The Facebook-is-dying camp is much livelier here in Silicon Valley. And it got a big push this week by the Pew survey showing people are either so frustrated with the social network or so busy with their own lives they abandon it for weeks or months at a time.

That is, Facebook has become such an unpleasant place for so many people. It snoops on our life moments and intimate thoughts in insidious ways that consistently surprise us. It shares our data with advertisers, who jam their ads into the river of our friends’ collective lives, often incorporating our own likes when we don’t choose to put them there. It shoves redesign after redesign our way, fixing things no one imagined to be broken.

Even if you agree with every word in the above paragraph, it doesn’t mean Facebook will die any time soon. In fact, both of these narratives seem far-fetched. Unless Facebook finds dramatic new areas of growth, which seems less likely with each passing year, it’s not going to take over the Web. But it’s not going away either. We’re stuck with its mediocrity.

That’s the boring truth about Facebook, one that doesn’t fit into any compelling narrative. It’s mediocre. It’s always been that way. What we thought at first were the quirky limitations of an emerging company have grown into an ever more constricting and annoying series of compromises that accumulate as Facebook matures.

Facebook is already big enough that it will be a constant presence in most of our lives for years, but it’s already become something most of us endure more than we love. It reminds me of when I first bought an iPhone and had to be on AT&T’s unreliable network in my neighborhood. The quality of the service sucked, but I stayed on because I needed that service (if I wanted to keep using my iPhone). Facebook is the AT&T of the social Web.

With this idea in my mind, I asked a question on Facebook as well as Twitter: Do you love Facebook? The Twitter response, predictably, was muted and weary of Facebook. The response on Facebook was more robust and varied. But because most of my connections on both are over 35, I also queried as many people in Facebook’s core demographic as I could. That is, people 25 or younger.

Some did love Facebook. A teacher valued how she could stay in touch with former students as they entered their adult lives. A childhood friend related how old friends she reconnected with on Facebook sustained her through tough times, and further how new ones she found there provided new job opportunities. This spirit of connection is one shared with many Facebook critics. This is what Facebook does best.

Others said things like this: They don’t need Facebook, but they can’t stop using it. They are serial deactivators. They are one step away from permanently deleting their account. They keep using it because they have friends who mostly communicate there. They are stealthily trimming their circle of friends down to the ones who don’t share food pics or a surfeit of family details. They mostly lurk now, just to keep up with friends. They worry about privacy. They feel things have worsened since the company went public. They would quit if a better designed version came along. They can’t stand it.

Perhaps the most damning comment was this: “It used to feel like a digital version of a neighborhood farmers market but now it feels like The Mall. I still go. It’s something to do and I might find something interesting. But I enjoy it less. I spend less time. I expect less.” If I worked at Facebook and read that, I would cringe. That is not a viable business model, no matter how big you are.

On top of all this, my wife, who with great reluctance finally joined Facebook a few months ago, asked me today how she could turn off all the ads appearing in her news feed. Like they were some form of spam. Which of course they are. I doubt anyone on Facebook would choose to have them there. Why are they there again? Right, to keep Facebook investors happy.

And that’s Facebook, now and forever. It’s caught between a beautiful idea of connection and an ugly execution of that same idea into practice. We come to Facebook for the idea. We get stuck there, against our better judgment, because of how Facebook makes that idea real.

I can’t think of a clearer illustration of mediocrity than that.

[Image courtesy toodlepip]