There are two aspects:
1. Future fate of search engine like Google
2. Online Paid Advertising.
Regarding functionality/efficiency of search engines in the emergence of wide array of Social Websites like facebook, where you need to login to get the information, the search engine crawlers are simply denied access to most of the data stored in the social website's custody, these blind spots are a real cause of concern. Each social website has actually vast amount of data, which come up from trustworthy sources, like something your friend (Real life) has recommended for you. That's a challenge, which seem to be quite visible in the Internet horizon.
Secondly, it appears to be rather difficult to monetize social media traffic for those website owners primarily because of member resistance. I would like to recall the kinda resistance offered by members of Entrecard when paid advertising was introduced in the system few months back. So, in that perspective, search engine marketing is still in the safer side.
But overall, the mission of most search engines, which is to integrate global widely scattered online data into coherent information stream in terms of specific search queries, are likely to lack completeness because of vast inaccessible data.
So far as SEO is concerned it will still continue to work. But if you do not take under consideration Social Media Marketing, you are surely going to loose a large market share.
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