Request of Phillip Linden

This about sums it up for those of you who don't read the GOM forums by Jamie. Talk about theft of an original idea. This simply sucks. Let GOM create it, enhance it, design it, and then simply take it without any compensation of any kind. And yes, I said theft of an existing and viable creation. Anyone should be wary about partnering and/or assisting LL if this is what will occur to future creations that interact with SL.

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(Please accept my apologies for being (relatively) tight-lipped until now. It wasn't until last night that things became crystal clear for us.)


Until we raised the last set of questions in the hotline forum, LL's plan, as explained to us by Philip (in email and over the phone), was to build a system that allows users to put their L$ up for sale through the SL web site. Other users would be able to do a single click purchase through the website or the client. This system would match buyer and seller, charge the buyer's credit card and automatically deliver to them. This system is almost complete and ready for what they're calling "beta testing".

If my description was unclear, let me say it plainly: the system described is a direct duplication of GOM's functionality with the addition of credit card billind. And this is taken from communications with LL - it is not speculation on our part. You might not believe it, but that's your choice.

LL has had someone working on this carbon copy of our market for a couple of months now. His name is Peter. I'm sure he's cruising these forums. Say 'hi' Peter. Don't be shy! Smile For the record, I have no problem with what Peter is doing. To the best of my knowledge, he's a fellow developer - not a policy-maker.

When we raised the issue in the hotline, Philip wrote to us saying that he was sad we couldn't make things work out between us. We responded reminding him of what had happened to that point. Our history is what follows.

"The Interview"
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LL called us up last winter and wanted us to come to SF to talk about integrating GOM into the system somehow. We were extremely excited about the prospect. It was something that Cory and I had been batting back and forth for a while. The trip turned into job interviews. There was all sorts of talk about having us work for them, helping to manage the in-world economy. We told them about all the cool things we were planning to do with the site, and about all the even cooler things we could do if we had direct access to SL databases. The data alone was enough to make us giddy.

When we returned, we didn't hear from them for two and a half weeks. When they did respond, they made it clear that they didn't want any more remote developers. This was okay - it's their choice. It sucked, but that was okay.

Instead we talked about other ways to get them what they wanted: better access to the market for everyone.

We talked contracts and APIs, but it was clear that a decision had been made after our trip that LL was going to have an internal market one way or another. The way Philip was talking made us feel backed into a corner. It was then and there that we realized that this company, with millions of dollars in the bank, could easily hire developers to build what we had, and with their access to SL users' billing info, could easily blow our market out of the water. When we were in SF, they told us of an internal policy of theirs not to compete with their customers, but in this particular case it seemed they were willing to break the rules.

We complained bitterly that if they were going to take what we had built, that we should be compensated in some way. We had laid the ground work. We had done the R&D. We had taken the risks. All the while, LL stood by and encouraged us. And now that we had proven that the market could work and that people would use it, they wanted it. Philip argued that compared to their regular billing, the market would barely contribute to their revenues so that GOM wasn't worth much of anything to them. We explained that without their intervention, at our current growth rates, we were on track to be making enough money for Tom or I to actually take GOM on full time. He didn't seem to care.

"The Offer"
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I guess we complained enough. Philip finally sent us a purchase offer for cash and stock. The stock was apparently the same as what they give each of their developers. The cash was piddly - no matter how you look at it. It wasn't even in the same order of magnitude that we would have expected. Everyone we consulted told us that the offer was insulting.

We replied with a counter offer of a more reasonable amount, but still much lower than a proper valuation of the company would have produced.

Philip replied saying that we were obviously talking about two different things. He continued by withdrawing the cash offer and suggesting that we just take the stocks and that we sit on an advisory committee to help them build their market.

We were stunned. We declined of course. We couldn't figure out what was going on. Philip wasn't negotiating a purchase. It was almost as if he was just trying to get us to go away. He could later claim that he made an offer - an attempt to work with us - but that we were too unreasonable to accept it.

Things were quiet for a few weeks, but knowing as we did that they had a developer on the task was bothering us. Should we be blowing our brains out writing new code in an effort to compete with an unlaunched and severely monopolistic service? Or should we be pursuing other options? We asked for a little clarification and didn't get any.

At the time, they had posted for the VP position. Other users were questioning their intentions and so we asked for clarification in public - in the hotline forum - and you all know how that turned out.


When Philip told us he was sad, we reminded him what had gone on before. He said he would like to look further into the integration API.

Again, we were stunned. And happy! We thought for a moment that our bitching and moaning had actually accomplished something. I chatted with him and explained exactly what should be done to build a generic "banking" API which would allow what Philip referred to as "banks" to plug into their trading system and sell L$.

Again let me make this clear: what we proposed was a system that would allow IGE and Anshe and anyone else for that matter (meeting the requirements) to sell L$ through SL's one-click interface. We were not asking for sole access.

The system we described was a simple XML-RPC API over SSL. SL.com would poke GOM (and any other 'bank systems') when a user wanted to buy. We would respond with a time-sensitive quote. If the user agreed to purchase, SL.com would poke us again with the order. We would respond that 'yes that order was filled' or 'no, that quote had expired'. We would have to do some fancy analysis to determine a safe price on the off chance the market moved before the order got filled, but between Tom (a financial engineer for one of Canada's largest banks) and I (an experience software engineer and long-time trading system geek), it would not have been all that hard.

Philip went off for a day and then came back to us. He said that they wanted to push this out in a very short period of time, and that we should do things his way for now to help with the beta test, and some time in the future they'd reconsider our API. It would have required too much work on their part he said.

And what was his way? We were to scrape SL.com pages and use their HTML user forms in the existing system that Peter has built. When a GOM user posted an order, we would relay it to SL.com through these clumsy (and brittle) HTTP scrapes and posts. When an order was filled or cancelled at GOM, we would cancel the order at SL.com. When an order was filled at SL.com, we would have to scrape some status page to find out.

Now first of all, any web developer knows that XML-RPC is dead easy these days and provides a much more stable and robust way of communicating between sites. That was too much work they said - they needed it done now.

Second of all, that asynchronous communication between sites could easily lead to order status chaos. Say for instance Joe placed an order at GOM to sell. GOM would notify SL.com. Then say that someone filled his order at GOM. If someone else also filled the order at SL.com before GOM got a chance to update them, that order would have been filled twice and someone would be losing the cash. We assumed (and Philip didn't argue) that it would be us.

And third, this made it clear that they had no intention of dropping the idea of running their own market. They wanted us to spend our time and energy twisting our site to help them beta test a system that would eventually put us out of business.

We thought these were all pretty compelling reasons to go with our alternative.

Philip's response was roughly this: "You're just throwing up roadblocks. We'll find someone else to help us beta test."

With a wave of his hand, he dismissed two rather experienced people - and two of his long-time customers - and their concerns.

Now over the year and a half that we've been servicing Second Life, we've had to put up with a fair amount of bullshit from LL. This, however, is above and beyond.

Anshe, I'm guessing you'll be the guinea pig for this one. If they tell you that only big-time sellers will have access to this system, be careful. It will greatly increase your volume for the beta test period, but if (when) they decide to open selling to the general public, you too will no longer be able to compete.

Tom and I are very disappointed in the way this has turned out. We're still trying to figure out where we stand and what we should do. Again, we apologize for keeping most of this quiet. We were really hoping that it would work out well and that we'd have one big happy announcement to make at the end of it all.

Now, I just don't know what to think.

J

It is possible to do money transfers that cost very close to zero, assuming you have a trusted relationship.

Basically, LL will be providing a service for close to free to GOM / IGE / AnsheChung.com

Ironic, I think given the reactions in the forums, that this will likely end up costing LL more than it makes them.

GOM was only loyal because they had to be. All the other gaming companies told them to take a flying leap when they whined about Fruad and LL was the only one that offered to work with them. So GOM was forced by the market and their lack of ability to withstand fruad (I am sure IGE is defrauded daily) to suck of to LL and make SL their primary business they didn't start out that way.

Loyalty and Friendship are great for "Lord of the Rings", but they don't fly in a RL business market.

Thanks for posting that, Lynn. That's the info I was referring to, and which causes me concern. I'm trying to keep an open mind, and remember that I've always had good dealings with LL in the past. I'm also remembering this is only one side of the story. But, unless Jamie is lying... doesn't look good for LL.

I'm sure there will be a lot of people who don't care if a couple get it up the arse for the good of the many, but I do care. I think it sucks.

Not true. Read Jamie's post on how he offered suggestions to the Linden's on "how to build a better wheel" and is now seeing them copied. Loyalty and trust were broken, because they were partnered with LL.

I can't say I'm sorry I don't share your attitude.

I think it's important to ask yourself carefully "What benefit is this to LindenLabs?" when considering this change.

As you look into it more deeply, you'll realise the only benefit is that it improves the market for content and services in SecondLife.

This brings no profit (at least directly) to LL.

Not really. The profit margins from trading currency can be very tight. The 3% hit in Credit Card trasactions that LL will have to pass on will cut into their profit margin. Unles the volume (which I think it will) makes up for this the currency traders stand to lose a little. They can't afford not to sell some on LL website even if they keep their current formats, with this change they will have to sell some to LL to compete in the market.

After three years of "we're NOT going to sell Linden dollars" -- then why all of a sudden take the creation of people who worked very hard to make it successful? WHO will benefit? Right now, Linden Labs stands to benefit by possibly putting a user-created company out of business.

You don't trust people like that in business. You are suppoed to keep your cards close to your chest. I'm not going to argue this point anymore, because people are emotional and this is the fast track to no where. GOM founders have been prone emotional outburst on forums all over the internet for over a year now. I think some of that emotion over business sense is what has lead them to the position of feeling cheated (which may or my not be the case, we don't have all the details).

How is a user created company put out of business? Third party markets, including GOM, are providing the currency being sold. As far as who benefits, end users benefit by a) not having to use Paypal and give up privacy information to OTHER SL RESIDENTS b) by being able to more readily buy currency, again, without having to use third party sites.

And with added competition, how is GOM not going to be going out of business? You will now have Anshe, LL and IGE to compete. LL resident created and supported GOM from the initial creation. LL supported them in their idea, GOM helped LL in creating/revising the API's needed to do this type of transaction.

Is it only me who's seeing an end-user partnership with LL being broken and a creation being stolen?

Hell Cris, even you admit that LL is taking the postcards sent to your site WITHOUT asking if they can do so or even letting you know about it. In reading Jamie's post, it's very clear that all of a sudden LL had a change of heart about selling Linden's to the players. I don't take it for valid business reason that LL would take additional expenses to run the money exchange and pay for development plans. LL has been developing this for awhile; and now that "beta" is here -- now the announcement comes. And yes, they have stolen an original creation by a SL end-user for their own purposes.

Eboni -- when you work with LL on a partnership basis, whether or not it's a formal or informal agreement, there is a reasonable expection of trust when dealing with an "up-and-up" company like Linden Labs. This isn't emotional, as you've stated previously, about Jamie or GOM. This is a complete about-face from a company who for three years has stated they will NOT sell Linden dollars. This is from the company who SUPPORTED and nurtured GOM.

Maybe others are right. Maybe Jamie and Tom should have patented their ideas and code. Wouldn't it be lovely if for every business transaction done on the Second Life website that a certain amount had to be paid to Jamie and Tom? Sweet licensing from patents, extra loss and expenses for Linden Labs.

And they still aren't selling them. They are acting as a pass through service.

Then why did LL want to purchase GOM with a stock/cash price if this wasn't in the future? Why won't LL take the time and implement/code this correctly instead of a rush-rush, let's get this out to the end-users now? It's not been stated HOW they will implement the "best-buy or purchase price" for their own endusers by their webservice.

And yes, in the future LL will sell their own dollars. They will be following the trend of Everquest, There, and other gaming companies who have come to realize that there is a good bit of money to be made by selling virtual items.

But the way they are implementing this is too damn shady, especially for a SL user-created code.

Wait, what is there to patent? An idea that is as old as the hills? The GOM software wasn't an exclusive for SL until they got their ass handed to them over and over via paypal fraud.

LL adding this highly useful service to the SL client is not competing with in world content. Nor are they directly competing with L$ sellers by creating currency and artificially setting a price (talk about insane inflation)

While the world within SL is build by the residents, LL does have the right to innovate and enhance their tools to improve the user experience. If there are tools out there that have been created to work around SL limitations... well those tools are at risk as SL functionality gets built out. That is very different from in-world texture, prim, script and entertainment work.

Re: the IP theft accusations: Functionality around a currency exchange is not rocket science. If there were some really fancy algorithms at stake here, then I might feel differently, but the notion that there is IP theft going on here seems quite a stretch to me. Lots of companies go through a build versus buy versus partner debate, and if they decide to "build" and it looks like a prospective partner, that doesn't mean they were thieves... especially if the basic design is common sense. ... this is a big reason why large software companies are so careful with their NDAs...

What makes you think they are using user created code (and it can be argued at GOM Founders are hardly members of community, but 2 people who set out to sell online currency and only found one company that would work with them after failing with all the others)?


You make a wheel. I offer to buy the rights of the wheel from you. You refuse. I am make my own better wheel. There is nothing wrong with that.


The fact they claim to have "gave away the farm" to LL may or may not be true, we will never know, but if they did, then they can only blame themselves.

like you, eboni, i don't really see what "farm" there was to give away. Certainly nothing patentable -- although with the current USPTO process, I wouldn't put anything past those bozos!

I truly hope that nothing you ever create in SL is taken from you.


GOM created that code, refined it and even worked with LL to show the areas that were weak. History speaks for itself on the forums and even in Phillip's own words.

GOM didn't fail with all the others, the competition with IGE is too stiff for other currency gaming companies to exist and make a profit. Read up on what companies IGE has purchased in the last two years to find out. IGE has the money available to them to fight off lawsuits from Sony, Blizzard, etc., where a two-man operation can't.

I don't agree with you and your attitude over a "home-grown SL product" -- an idea created by end-users that is now being taken over by LL, and probably implemented poorly without safeguards knowing history of LL.

I am truly surprised that with all the problems with the asset servers, existing bugs, and god knows what else going on with the core software that LL would put forth expenditures for this type of programming and bypass other needs.

LL had offered to buy-out an existing company that has created CODE to trade/sell money within the game. The word within is the key. IGE can't sell within SL. IGE can't trade/transfer/sell WITHIN WoW without an indivual on both sides of the transaction. GOM can do this within SL with their ATM's for deposits and withdrawals.

GOM supported the community back when people needed quick land sales, they donated their time and forfeited their fees for *any* project that the SL community did wherein donations were sent to organizations. LL kept their hands out of it, as LL should keep their hands out of the money market/purchase business.

We disagree. I support home-grown ideas from SL creators, and I would never insult or make fun of anyone who's idea has been stolen. I'm simply happy that I don't have your attitude on this subject.

I surely hope that Jamie and Tom have detailed notes of meetings with LL on the code and code changes and offer to purchase. I'm a businesswoman at heart. And I smell a cheat.

And btw, it was from that fraud that GOM showed LL where their code was weak and easily manipulated -- you know, like the permission BUG that has been going on now for over three year?

LL has a history of weak code when it comes to anything dealing with security, let's look at the recent hack of many, many products that happened a few weeks ago. LL needed outside help to find that weakness, and it happened to be GOM that was able to point it out to them.

I just want to point out that GOM did not start with SL. It was around long before that. They got scammed with other games and worlds though. It seems some people giving comments here need to learn the history of GOM.

I dont see how this could be a bad thing at all. SL should think about the future of SL and its residents, businesses will need to adapt to chose changes. All LL wants to do is make it easier to buy L$. It is a good change. Will GOM have to change business model? Yes, can they make as much money? Probably Yes.



Lynn, with all due respect you are really twisting this. Yes they found a security flaw in something they were the first one to try. Also to bring up a client hack that LL fixed in less than 24 hours is not fair at all.

The "hack" has been in their core code since day one when it comes from permission bugs. It is a fair statement to make.

Back in beta, people were stealing textures, clothing and code from user-created content, and three years later, even with improved code, it still continues. That's a very fair statement to make.

But it was GOM that showed them the weakness in their API for monetary transactions. I'm still waiting for the first end-user account hack to occur because of security issues. (off topic for this discussion)

buy and sell directly in Euro and CAD! you will make money!

Now explain to me how it has anything to do with making L$ easier to buy.

The Fraud came from them getting scammed in SWG and There. They kept getting screwed time and time again, and decided to give up all these other games to work will LL because LL actually would talk to them when the other games wouldn't. GOMw as not created for SL, that was a defacto thing that happened after all the other gaming companies and paypal told them they didn't care.