Land and land tier fees ARE the basis of the Linden Lab earnings. At least this seems to be the main way they make their money.
But there has to be a balance. With all of the new Sims they have already put into the game, and like mentioned earlier, 20 new Sims on the auction right now, in my opinion they are negatively impacting many people in the game.
Any new technology requires a certain organization to achieve it.
Capital (money) is always required. To even get second life to this point I am sure millions have been spent already. I'm sure Linden Labs are not "profitable" yet, but very few businesses in their development/initial growth stage ever are.
Another requirement is the infrastructure of equipment, software, personnel, etc. LL has achieved much of the personnel & software development by having open code so that anyone can develop parts of the world and therefore not have to pay programmers to develop those ideas themselves.
But why are programmers and these knowledgeable people doing this? It is unbelievable to me that so many players evidently don't understand how this world is being created. In order for the LL model of development to work successfully, they must have realistic ways for these people to benefit financially from their work. PERIOD.
Land has been one of those ways. I think if you looked at the overall contributions made by the top 50-100 land owners in the game compared to others we would find they have contributed much to this world. One reason is because they have been able to make the money to pay others to develop additional ideas that they may not be able to develop on their own. So I feel land is the basis of the lindens earnings but also many of the other developers in the secondlife world.
By flooding the game with too much land they are effecting every other aspect of their business model by taking away one of the top ways many of the addtional developers make it worth their time to do.
I also feel that they need to make the land auctions TRUE auctions and quit this minimum started bid crap. There are enough land buyers in the world now that would not let any land sell too cheap. How many of you saw the 46,000 meter or so sim sell for $1,000 about a week and a half ago. Counting the land tier she paid $1195 and then sold the land for 3.8 - 4.3 per meter. If that was a real player she lost over $700. Have the Lindens decided to just start taking advantage of inexperienced, unknowledgeable players?
The bottom line to me is this. Land effects everything. If the lindens do not implement the land correctly they will fail in the long run. It does appear they are being very short sighted in trying to make the fast dollars now. They are missing the big picture if that's the case. And this world people liking just to "PLAY" in, won't exist.
Really, why do all of you against players making any money, only think the Lindens should be making any. TOO many people are contributing time, ideas, talents, etc to help make this idea successful? That concept is just inept.