New "Bulk Sales Land" at the Auctions. Anyone cares?

An entrepreneur can base the decisions regarding the course of a company on a lot of different numbers. You can go for market share, you can go for security, you can go for maximun earnings next quarter, you can go for long-term value ... In the M&A market, for example, a companies value is often estimated by calculating the discounted cash flow (DCF) which might take into account the free cash flow of the next 5, 10 or more years. A decision might lead to lower earnings next quarter or next year but to a much higher DCF based value of the company because of higher earnings or lower costs in the future. The future is far away and usually a bit uncertain, though.

It is not always an arbitrary decision between different possible goals, too. If you accept lower earnings now to go for a higher long term value you need another source to pay for operations now. If you don't have that you have to focus on earnings now.
This would only work out for LL if - by giving away land for free - they could sell significantly more land. This might or might not be the case. Which leads to ...I am sure people would own more land in this case. People tend to behave irrationally and buy something they can not afford now with a huge markup if they can just pay for it in "low easily affordable monthly installments", LOL. I am just not sure, if the "more" would be enough to compensate for the lost payments
You mean the Market Share vs. Market Growth matrix? Yes, I know that. It is usually called BCG matrix in my trade because it was developed in the late 60s by the Boston Consulting Group (BCG) for strategic consulting. I am not sure if the quadrant you call "problem child" is the same one we usually call "question mark", which seems a term that is much more polite.

No disrespect intended, but I very much doubt that LL is already moving out of "question mark". The question mark quadrant is characterized by high growth and growth potential, low market share and a negative cash flow - which fits, I would say. Maybe LL might become a star (high growth, high market share and (little) positive cash flow). But this will take some time.

On little additional problem with giving away land for free. It is usually overlooked by most residents lamenting the high prices of land in SL but selling land actually takes time and effort. It is relatively clear by a lot of LLs decisions in the past months that Linden Lab does not want to accept that burden. That is the only reason they offload it to residents (not some arbitrary decision to install am market for real estate speculation).

If land would be given away for free nobody would do this work anymore. So the Lindens would have to do it themselves again. This is not the direction I see LL going currently. Quite the contrary.

The new tools for private sim owners, the new group tools and the bulk sales experiments point in a direction which means more and more power and tools formerly in the hands of Linden Lab will be given to residents. This does not happen for altruistic reasons. Linden Labs core competencies are others than developing and selling virtual real estate.

There is a lot both of us do not know the answer to Dana, given that we do not have access to Lindens internal data.

We can make guesses but the issue with that is the further out you go the more uncertain those guesses become.

However I think one point we are both agreed on is peoples attitude to money.....that is a monthly payment that seems affordable is more attractive to people (even if ultimately it is not), therefore the key to that is to try to lock in rental income by min rental periods.

Then you can calculate your discounted cash stream and move on from there.

On the issue of land editing once "baked". I have got a script tool that raises or lowers land, I also know this is primitive in comparison to a machine tool I saw on a private Island where you can use it to terre form an entire sim.

Therefore I agree with you comments Linden are going down the wholesale route, a common carrier route. Which brings us back to the original point, does Linden need land barons to grow, or is the land baron economy a barrier to dollar revenue growth in Second Life.

Finally of course there are the currency issues others and I have highlighted, together of course with peoples attitude to Second Life, game or platform. Regardless of what Governor Linden states Second Life IS, the majority attitude to this issue will influence marketing strategy

I was shopping for new land, and was particularly looking for interesting shaped land to build. I wanted sloped waterfront, to me it shows off a build like nothing else and you can do so much with it. I was prepared to pay more for interesting. I found the perfect one too, after looking everywhere. It was pricey, but I love it! I started building within minutes of purchasing. So yes, there is a market for premium non-flat land.
Thanks for helping me find it too Dana!

I wish they'd give it a try. They sort of are but they're being sneaky about it.

I just upgraded to Premium and bought first land, because of one fast talking member of a group I'm in. It's funny, he used to be all "I'm not going to spend any money on SL, EVER!" and one time I know he bought on Lindex he spent the next month camping to pay it back. Now I have no idea how much land he's into all of a sudden.

But we may be moving to an island, and if we do I'm going back to Basic. They're renting the same amount of land for one month for L$6500 (I think that's what it came to), which is less than we paid for a neighboring 1024 to grow the original land. Heck, that rent's less than our accounts are costing.

What if they made the "First Land" go for a bit more (say L$1024/512m) but let you buy as much as you wanted at that rate, instead of auctioning land off. With a premium account I could buy 1536 the first month from my stipend and initial bonus... and keep paying the $18/month to keep it.

Parcels in our sim seem to go for around five grand for a 512. Am I going to fork out something like twenty five bucks to some land baron for a measly 1024, on top of paying Linden Labs eighteen dollars to hold it? Not me.

We have developed and use such tools ourselves regularily. Its the only way to efficiently form larger areas. They always have to be polished by hand afterwards, of course. The only problem with the current batch of whole sale sims is, you only can change them +/-4m. This is enough to produce some ugly steps and edges when many owners flatten their flats without any regard to their neighbours doings. But it is not enough the create some beautiful new terrain.
I am beginning to hate the word "land baron" more and more. At least for most of us in the land business it obfuscates the rather simple job we are doing: buying (and financing) land in wholesales packages, cutting it to a size "normal" residents can digest, negotiating with residents, recutting it according to their wishes, removing trees ... Believe it or not: besides some money this job needs a significant amount of time, some experience and - in the best cases - a little love for the land.

It is not a simple decision for Linden Lab, "to do without the land resellers". They could do that any day - but would have to do a job themselves which they obviously don't want to do. This "don't want to do" is not an accidental decision. Paying real world employees to do this job would be much more expensive.

Hmmm ... what sim are you living in? Five grand for a 512 would mean nearly 10L$ per sqm. That is the price for prime land, waterfront for example!

Your attitude expressed in "fork out something like twenty five bucks to some land baron for a measly ..." shows another advantage of using residents as middlemen in the land business (for Linden Labs): all the anger about high land prices is directed to fellow residents and not towards Linden Lab.

Just for the record: most fresh sims are won at the auctions for 4.8 - 5.2 L$ per sqm these days. Most of this land is resold around 6 L$ per sqm. Sounds like a nice margin? Please consider that for the time the reseller helds this land there is tier due! This means that more than 90%, sometimes more than 100%, of the price you pay for the land goes to the Lindens - in fact already been paid to the Lindens before this deal!

This is exactly why I've always challenged those who post about 'greedy land barons ruining the game' etc. I loathe the term land baron, and I'm not even one of them. I look at a lot of land, and I see these so-called 'barons' are running on what I consider extremely low margins, given the inherent risk of investing in SL, and the disproportionate ratio of purchase price to tier expenses.

I just see them providing a valuable service, both to residents and LL. Imagine if there weren't people prepared to buy whole sims, even multiple sims? For LL, if they bypassed the barons and sold new sims in small parcels, they would take a big hit on tier revenue. LL starts collecting tier for the whole sim straight away, instead of gradually over weeks and months. Then there's the work involved in getting it ready for the market, it would be more expensive and a lot less efficient for LL to pay their staff to do the same thing.

The residents get good value from barons. Look around at a lot of land and you'll see it's the non-baron residents selling single parcels that tend to price land way above fair market value. Usually it's madness, holding out for more Lindens whilst losing US$. The only way LL could provide comparable value to barons on small parcels in new sims is if they sacrificed a lot of their revenue, and ate some extra costs, and I doubt they can afford to do that.

edit: And that's why they should pay more attention to the land market, and be careful about the rate at which they create new land, they shouldn't bite the hand that feeds.

If people were not willing to buy whole sims, then perhaps the Lindens would start auctioning off reasonable size parcels again. I don't think they'd just stop selling land.

I have read this comment from you a few times in the last weeks but never understood what you mean with it. So I think it makes sense to ask.

For what parcels are you looking at the auctions? I checked the current auctions and the "closed" page. There were two or three dozen parcels smaller than a whole sim. Some down to less than 1024. A few were not sold but most of them went off the block at typical market value. What are you missing, exactly?

A question of who has the comparative advantage I guess. Barons can sell small parcels more efficiently than LL (talking newly created land here). Selling whole sims must be a much better way of doing business for LL.

An 8000 m2 PG plot with grass and water (NOT SNOW) that is not surrounded by walls or next to a nudie club.

I can wait. When I see what I want, I'll buy it then.

Ooops. This sounds like a hard one. Sorry to say.

I remember some 60 sims we have sold in the last few months but there was only one that contained land like you described. This seems to be a very rare commodity. And you rarely cut a 8192 in a PG sim. Demand for that isn't exactly huge. Good hunting, Barbarra!

There's an interesting PG 8000m, surrounded by water, I can't remember the sim name, but it's adjacent to Bolinas and has a Linden suspension bridge in it.

edit: I remember, sim name was Hooper - and it was there yesterday.

Dana, I take your point about the land baron system. As I have said before your posts are quite often right

In other words Linden is the wholesale merchant, the land barons are the retail stores, and the punters are the end users.

However in real life (in my country) the end user (shopper) tends to hunt for bargains, hence the growth of vast supermarkets (Walmart/Asda, Tesco) for the basics of life, which is food.

I suppose using that example to make profits as a land baron, you need to knock out the land at the lowest possible price to resale quickly thus avoiding too many tier payments eroding profits.

That tells me any land baron needs to be substantially capitalised in order to carry the sheer number of Sims to achieve any profit on turnover rather than margin thus overcoming individual avatar resistance to paying a middleman or high land prices.

In other words small land barons and individuals hoping to trade modest parcels of land into big profits are doomed before they start, due of course to tier payments and pricing pressure. In turn that indicates to me the auction process run by Linden for smaller plots of land (less than one Sim) is likely to grow at the expense of failed small speculators.

Again just a personal view

How about a 2048-4096 mature plot with grass, sand, and water, grass starting no more than llWater()+4 and no less than llWater()+1, and 20-30 meters of slope, or a 4096 meter plot on grass or grass and rock with about 100m of slope?

And no hootchie clubs or giant toilets or adjacent plots with exclusive ban lines up.

I'm seeing prices like that for unimproved first land plots too. I have no idea what the sellers are smoking, perhaps all those particles from people's teleport effects are cumulatively toxic? I need to spot some more particle recyclers around the place.

Alas, Hooper is zoned to exclude folks like me--and the plot is priced never to sell, I believe.

Some folks think they will get dwell by marking plots to sell at exhorbitant prices--that doens't work with the new map, of course. Anyhow, I don't want to be restricted to a 30 m suburban build either, forgot to mention that in my original description. I'm addicted to buidling and will probably change the whole place every six months or so, but suburban is right out, as they say.

I have a plot that might fit that description in Kaili protected water and roadside.

I have a plot that might fit that description in Kaili protected water and roadside.

I admit, it is boring, but ...

any other opinions on the new bulk land auctions? Attractive or not? Useful for projects of what kind?

No demand? hehe.
Some people thinck too high end. in the last 7 days I've sold three 8100M PG lots (unremarkable) whole, and 2 more in sections .

How did I do it?

I'll let you's guess ;-D

Any way, the demand is there, the prices are just WAY too high. Who the hay is going to buy a PG 8100M for $L6-$L7 a meter?

Lindenomics: Whither Stipends?

Entitlements have been a facet of the Second Life economy since its inception. Initially, there were Stipends and Reputation Bonuses; today, we have Grants and Traffic (or Dwell) Awards. Only occasionally has the logic of entitlements been examined – and the usual question is, “where's mine?”

There are plenty of sound reasons for retaining entitlements in Second Life. New Residents are arriving at an unprecedented rate - our population is increasing by about 15% per month - and new Residents need to have some money in their pockets. Further, the creative efforts of Second Life Residents are causing the quality of goods and services, along with the number of transactions in a given time period, to rapidly increase – meaning that Residents are increasingly interested in purchasing more.

Based on these growth factors, Linden Lab must actively increase the money supply - basically print new money and somehow get it into circulation. If we didn't print new money, the existing money would become scarce, making Linden Dollars increasingly expensive in US dollars (see How It Works).

However, if printing money sounds like a bad idea – that's because it can be! Long the last economic refuge of African dictators, printing more money than the world needs can be devastating. In an economy as hot as that in Second Life, infusions of new money balance the rapid growth of the economy and keep the currency exchange rates fairly stable. But, as the economy begins to slow (Second Life's economy will cool down; if it continued at this rate it would be the largest in the world in only a couple years!) Linden Lab will reduce the amount of money that we put into the economy to keep the Linden Dollar from becoming worth too little!

This means that stipends, traffic incentives, money given to new Residents and other forms of entitlements will be steadily reduced. This will happen carefully, and over time, all in an effort to preserve the value of the Linden Dollar – making it a constant, reliable currency in Second Life.

** written by Liden Labs for everyone to reply back to the editor, i sure am hopeing that each and everyone of you will

Well, never mind that 8000 sm. I'd better sit tight on my little waterfront terraformable plot in Minna until I see how the announcement affects the economy. Maybe I'll wait till I have a little more cash in my account as a buffer for bad times.

Nobody was questioning your abilities as a salesman, Shippou. I bet you are very talented and clever.

But, given the fact, that PG land is relatively rare, waterfront is relatively rare, large parcels of PG land are relatively rare ... it might be not too unreasonable to say that a 8192 plot of waterfront PG land might be even rarer? If demand for that kind of land were high, I am sure Linden Lab would produce more of it.

Rechecking my post on it, I can't find the point where I said "no demand". I guess "isn't exactly huge" was that term.

BTW: the PG waterfront our group sold went for 7.5 L$ per sqm. That was fresh land, though.