Linden Value Outlook 2006

It's shooting up way fast.
Terrible!

Is there any hope?




Let me know if this is accurate by the way.
Sell rate at 275L/$1

If a buyer purchases 100,000L:
$363.94 From buyer's paypal to LL. (This includes $0.30 buy fee.)
$350.89 From LL to seller's paypal. (This takes into account the 3.5% commission and the $1 paypal fee.)

LL's share = $13.05

Can somebody say profiteer?

Where did you get the buy rate @ 192 from?

Probably yet another person inputting 100 lindens or equivilent in, and ignoring the fact that the buy rate is a fixed 50c fee, and the selling fee is 3.5%.

The sell rate is at $276/$1.00USD now & no sign of it coming down either (contray to the $252/$1.00USD around october last year). The Linden dollar is depreciating fast.

Should the Lindens intervene?

Sorry. Mistake. Youre right. The transaction is quivilant, but I didn't notice that on the SLX.
I made the proper adjustment to the first post.

Crazy, isn't it? The same thing happens when I go to a book store. The bastids charge me more for the books I buy than they pay for them from the wholeseller!

Oh wait, I think that's called "business", nevermind.

No.

You must be kidding. Do you really think making a 3.5% commission (+30 cents) is an excessive profit? If you do, there are competing Linden exchanges out there. See what their rates are.

Well, see, we want Linden Labs to make money, cause otherwise, gee, they go out of business, and Second Life disappears.

There is a difference between business and profiteering.

Sorry, but there is a difference between fair business and profiteering.
You are mistaken because you are giving them the same definition.

How do you define the difference, Business Mission?

Okay, my first reply was sarcastic; this one isn't. I don't understand what distinction you are trying to make between those terms. Would you care to explain it a little more? Thanks.

Yes they may take a sum, but to call it all profit is unwise, dont forget when you buy lindens you will most likely be using a credit card, and in most cases the credit card processor (bank or service provider) will charge linden labs a percentage fee for processing that credit card.

Yes, LL does not make money on Lindex transactions. They provide the service at cost.

Who. Cares.
If I could be Linden for a day I would ammend the TOS so as to forbid speculating on the Linden dollar value.

Eggy for Lindenhood!

I'm sorry if you do not understand that legitimate business and profiteering are two different things.
I guess I could explain it that one is excessive and one is not?





What are you talking about? LL charges an additional precessing fee on top of the commission. How could you say they are not profiting off of this at all, when they riddle the entire game with Lindex ads. Sure you can clikc the little button on top of the screen, but Lindex is spammed all over the place a if we did not already know about it.

My guess is that the USD 30c fee goes directly to a credit card processing company such as Verisign.

I'd further guess that a portion of the 3.5% fee goes to a company that manages money transfers between banks. Which is often a service of a bank itself, like the online-world-friendly Wells Fargo.

3.5% is a rather high percentage when dealing only with a financial institution other than AMEX.

There may be some 'profit taking' from a fraction of that, but I would be surprised if it even covered the Company's accounting overhead to keep an eye on Lindex in the first place.

If you want to see profiteering, look toward some of the 'online store' options offered by major internet portals - the ones that ask something like 5% of every sale that comes from clicking through from their directory listing. That is highway robbery, but what is going on here - is not.

Very few companies would entertain credit card micropayments at *all*. I don't see a profit center here for the Company, other than indirectly - by creating the convenience for us.

I would be interested to hear any comparable analysis from someone in the finance industry - 3.5% seems a tad high, but not out of the ballpark.

Some people are of the opinion that paying $9.99 for a life time account is excessive.

And yet others complain about receiving a stipend of "only 50L a week" after signing up for a FREE subscription!


Need I say more?

I have no idea what you are talking about or what you are getting at. You are suggesting that LL uses a portion of the commission to pay for transaction fees. This is absolutely unfounded. Transaction fees and 3.5% commission are 2 completely different things.

LL charges transaction fees to process transactions.

There are 2 types. Paypal or check.
$1.00 fee is for paypal.
$10.00 fee is for check. ($15.00 if outside the US.)

These fees are just as absurd. It costs 0 dollars for LL to move the money into Paypal. All the player has to do is click the buttons, and it is automatic. LL does nothing, and pays nothing. Ergo 0 transaction cost for Paypal.
A payment in check should cost no more than $0.75 for a check and postage.

Transaction fees pay for the transaction as well as take profit. Even more profiteering going on with over priced transaction chargres.

I don't need to look at other online stores regarding profiteering. This is an absolutely irrelevant comment. We are not discussing them. We are discussing LL. Other places could be profiteering a billion times worse or they could not be profiteering whatsoever. What other people are doing or what you or I are doing holds no relevance to this discussion.

When someone buys $L, Linden Labs (generally) charges a customer's credit card.


To charge a credit card, you *must* pay 3 fees.

1) a yearly fee to be set up for processing credit cards. Assume about 200 USD per year.

2) a per transaction fee that is maybe 25 or 30 cents

3) a percentage of the sale to the merchant account holding bank. 1.5% is not uncommon, and sometimes it's a lot higher.


In addition, it costs money to ensure that the tens of thousands of credit card transactions every year are being accounted for correctly, all day, every day.

Yes, it should be automatic and perfect, but anyone who used 'internet billpay' services in the 1990's well knows what can happen.


The fee seems a little bit high but not out of the ballpark. It's not a scam.

Now I'm confused again.

Was it not you, Business Mission, who defined "profiteering" as "excessive" profit?

If "excessive" is the test, is not the going rate in the market a working definition of "standard," and therefore not "excessive?" In most legal tests, what a "reasonable man" would do, or what "ordinary custom and practice" requires is the default definition of "not excessive" or "not negligent."

Or is it your position that even the going competitive market rate for fees for transaction processing is "excessive?"

If so, I ask again, as the question seems to have been begged: "how do you define an 'excessive' level of profit in transaction charges, if you exclude reference to other levels in the marketplace?"

Ive already defined it frank.
Furthermore, there is no competative market.
This an interface of the platform. Any other exchange website is not part of the platform.
As you know, there is a fee schedule for users of the platform.
Basic: Free
Premium: $9.95
Then there are tier fees.
LL makes revenue from these fees.
LL makes revenue from auctioing off sims, and providing island sims.

It is not necessary to charge users anything more than a transaction fee to process Lindex transactions.