Hating on SL (Gawker "Deathwatch" Article)

Here's an amusing article about the end of Second Life.

http://valleywag.gawker.com/5158190/the-end-of-second-life

I actually agree with a few of the author's observations (though not conclusions or predictions) I agree that it's fair to take the lack of investors lining up for Second Life as a sign that Second Life has no future.

There are two problems with the the article though. One, if there is no private investment money available for Second Life, then working on the soft money (government and non-profit grants through primarily educational avenues) is the next best alternative.

The fact of that matter is that, at least from my casual reading, Linden Lab has been successful working the "education" angle, bringing in some money, but more important, free development resources (benefiting from what educators actually do with Second Life). About every other day I see a new article about an educational institution obtaining a grant to do some sort of Second Life project.

Now, I see no reason why Linden Lab won't squander the non-profit resources as thoroughly as Linden Lab squandered private investments and the hype on which it could have banked, but didn't. But if Linden Lab's management magically changed to something competent tomorrow, then the soft-money angle is actually a workable model for sustainability.

The other problem with the article is that the author doesn't seem to have any credentials to make predictions about the financial or technological future of Second Life. He seems to be a product of this age in which anyone with a blog on the internet calls himself a "journalist."

With the hype over it becomes fashionable to bash LL. While I am everthing but a Linden apologist, I doubt that academia is the right match. Is it so hard to see SL as that what it seems to be for many: A fascinating entertainment platform, allowing novel and unique ways of self-actualisation?

Yet LL is a profitable company. End of story.

Actually, being "absolutely in the ballpark of profitability" (quoting Phillip Rosedale at the time he stepped down as CEO) isn't the same as being a profitable company.

The ones who do not know, never learn

The irony to Gawker doing an article bashing SL is that SL is probably more profitable than Gawker and LL, unlike Gawker, is actually buying new properties instead of selling them. I normally would say that LL shouldn't respond to negative news report but it would just be funny if M sent them a box of tissues to help them deal with their loss.

I believe more recent numbers show a profit. I could be wrong.

I am not aware of LL profitability figures being disclosed somewhere. After all, it's a privately held company. Do you remember where you've heard that?

Also, being "in the ballpark of profitability" to me sounds more like "our losses are not abysmal" than "we're making a profit".

is there a courier service that would deliver something, but also record the actual delivery on video and put it on youtube?

i actually read the article... and i honestly can't say who has less clues about what SL is, the person who wrote it or the persons commentine at the bottom.

Yes, LL is profitable now.
http://www.thestandard.com/news/2009/01/30/interview-linden-lab-ceo-mark-kingdon

On the matter of additional investment, has there been any indication that LL or its current investors even want that yet? Nobody can buy shares if there aren't any for sale.

That's the first time that anyone from Linden Lab has claimed profitability. Ginsu Yoon evaded the question when asked in late Nov.

Linden Lab may not be looking for more investment capital, but they seem to have so many technical issues requiring immediate attention, that the absolutely need the money to address and resolve them as soon as possible (whether it's through more staff or outsourcing).

In one article which I forgot to bookmark (from around May of last year, as I recall), Mitch Kapor asserted that Linden Lab could go public based on its financials at the time. That indicates to me that going public is a goal, but Linden Lab is not ready yet to open up its financial records to the world. (Of course, goals can change.)

And I'm just making an amateur guess, but the only reason of which I can think that Linden Lab bought XStreetSL at this time- when it already has so much it needs to address- is that whether or not XStreetSL adds any real profitability, it does add a revenue stream besides land tier, which may look good in presentations to prospective investors.

To me, Second Life still looks like the product of a great idea executed by a poorly funded and managed company. If it has such great prospects, I would expect to see investors lining up the way they seem to be lining up for development of other virtual 3D social networks. This isn't the case of the great idea that is overlooked- Second Life has had enough press to put it on the radar screens of investors.

Finally found where I got the crazy notion of them being profitable.

http://nwn.blogs.com/nwn/2008/05/how-much-is-lin.html

"I won’t say [how much], but it’s not that high, although we are profitable and generating positive cash flow." - M Linden

I get the impression that LL made the acquisition after looking at long term revenue projections. Their primary revenue stream at the moment is all land based. If the land market tanks and demand for land craters, they are screwed. Getting a piece of the sales of in-world content is a more logical revenue stream to be moving towards -- Anshe Chung was way ahead of them on that curve. Since LL doesn't really create content, the second best thing is collecting up the commissions generated by sales through XStreet.