My First Two Months at Linden Lab

I’ve been with Linden Lab for two months and each day has surfaced something interesting — and often quite unexpected. So, what have I seen? Read on.

Second Life has evolved dramatically but perception has not kept up with reality in five important ways:

1. Second Life users are more mainstream than many assume. It’s not just tech-savvy early adopters or gamers. It’s a much broader cross-section of society with a median age in the early 30’s and nearly half the time spent in world is by women.

2. The diversity of use cases in Second Life is mind-boggling. If you were able to read every story around the world about Second Life, you’d see a tremendous variety of use cases presented – for instance, medical research and treatment, education, marketing, customer support…and the list goes on.

3. Second Life has an enviable business model. While some may have written off Second Life during our post-hype phase, Second Life has a business model most media, metaverse and social networking companies would kill for. We monetize unique users at many multiples of advertising based models. Plus, with a healthy and growing inworld economy of more than $330 million annually, our users are able to make real money and pay more than half of our fees with credits from selling Linden dollars they earned inworld — by creating valuable content and providing valuable services.

4. Second Life’s killer apps are just beginning to evolve. I’ve come to see a couple of use cases as future killer apps – namely virtual meetings and education. And, one simple feature – inworld voice – could be a significant product in its own right. Since launching 3D spatial voice inworld, our users have logged more than 7.2 billion voice minutes making us one of the larger providers of VOIP services.

5. Second Life is leading the industry toward interoperability. Finally, some have said Second Life is a walled garden that will go the way of AOL. Second Life is opening up, so the risk of that happening goes down every day. It dropped pretty substantially recently with the big news on interoperability from the IBM/Linden Lab partnership.

…Please read on as I expand on some of these points after the jump…

The diversity of use cases in Second Life is mind-boggling. The “hype cycle” drives Silicon Valley and Madison Avenue to identify trends, amplify them and then abandon them relatively quickly. Virtual worlds, and Second Life specifically, benefited and suffered from this highly amplified trend cycle. First came the hype, then the inevitable anti-hype. Now the conversation is more about the far-ranging and widespread set of activities that are happening in Second Life.

Every business day, I get a summary of the mentions “Second Life” and “virtual worlds” received in the web and print press around the world during the last 24 hours. On a light coverage day “Second Life” might gets a couple of hundred mentions. These figures understate press coverage because they do not include television or radio. Television has a big impact. A single news story in Poland featuring Second Life recently generated the highest registration levels we’ve had in a single day this year.

If you were able to read every recent article about Second Life, you’d see tremendous diversity in the use cases presented. Here are some “must-read” articles that show the incredible diversity of Second Life:

Second Life has an enviable business model. Most social media/social computing properties are struggling to build a business model (usually advertising driven) that can support their voracious appetite for hardware and bandwidth. Second Life is very different. Second Life is the only social media/social computing property where, at its core, user-generated content and the economy is the experience. As a result, our estimates place our monetization levels at 3-30x that of major media and social computing properties.

With a healthy and growing inworld economy of more than $330 million annually, our users are able to make real money and pay more than half of our fees with credits from selling Linden dollars earned by creating valuable content.

How so? All the content in Second Life (some 2.2 billion items, or 250 terabytes worth of data) is user-generated. Users buy and sell the digital goods they make using our virtual currency — the Linden Dollar. We generate revenue by selling land (where merchants build stores, land owners rent houses, educators teach and companies meet) and collecting monthly maintenance fees (somewhat analogous to hosting services), charging for currency exchange services (Linden Dollars to US Dollars and vice-versa) and for search and classified ad placement. We also make money as the economy expands and we issue Linden dollars to stabilize the exchange rate.

Another important comparison is with TenCent (QQ) – a Chinese internet company I have admired for quite some time. Though our user base is much smaller, our virtual economy is of a similar size to TenCent. A recent Wall St. Journal article reported that TenCent’s virtual currency (used by many of its 233 million regular registered users) garners about 45% of China’s $900M virtual goods industry or $380M last year. This figure is very close to the value of virtual currency transactions within Second Life. Based on our Q2 results (see earlier blog entry) Linden Dollar transactions in Second Life are just over $336M on an annualized basis. Because the economy is intrinsic to the user experience, our much smaller user base generates nearly as much economic activity in absolute terms as TenCent.

In addition, user-to-user transactions in Second Life grew 12% in Q2 and user hours grew by 6% (for definitions see earlier blog post). Land ownership is a critical component of the Second Life economy and the news is very good on this front. Second Life’s virtual world expanded by 45% in Q2. Resident-owned land now accounts for over 1.5 billion square meters of space in Second Life. Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked.

Finally, and this is the most interesting part of our model, the number of “profitable” inworld businesses continues to grow. By “profitable”, I mean that they have positive monthly Linden dollar flow primarily from their content creation activities in Second Life. What our residents build in Second Life demonstrates amazing imagination and creativity. Second Life is user generated content and collaboration on a scale that is unimaginable on the 2D internet. You can build a room, a house, a conference facility, an office park, a nightclub, a stadium, a game, a consulate, a hospital – and the list goes on. There are public lands for all to enjoy and private meeting spaces limited only to members of your group or company. All this creativity, combined with Second Life’s vibrant economy enables tens of thousands of our residents are able to make real money plus pay more than half of our fees with credits from selling Linden dollars that they earned by creating valuable content. Because of our unique business model, Linden Lab is profitable.

We are taking a big slice of this good fortune and investing it in a substantially improved experience for users including better registration and orientation processes for new users, an easy-to-use interface on our downloadable client, better tools for specific user groups, much better platform stability (more on this in a separate blog post) and improved outreach and customer support. Our users have been vocal about their needs and we are working hard to meet them

Second Life’s killer apps are just beginning to evolve. Even though the initial novelty has worn off for me, I am blown away by how effective Second Life is for meetings. I am fully convinced this will be a killer app. There is a lot of research on how communicating through an avatar enhances self-perception and risk taking. Many people who haven’t experienced a Second Life meeting will say, “There is no substitute for meeting in person.” Try Second Life for a meeting.

For years, I have been advocating and using videoconferences to connect with customers and employees. They cut down on travel costs, reduce a company’s carbon footprint and eliminate time wasted in airports. Unfortunately, videoconferences can be deadly boring. A Second Life meeting is the antidote to the tiresome videoconference. You have all of the tools you’d use in a real world meeting – plus you can use your computer to review data, do quick reference searches, look at spreadsheets, etc. and you have the ability to add text questions, responses, opinions and subtle interjections. In fact, just last week we learned about a new resident created collaborative browser for use inworld.

Using the virtual meeting environment for education is an even more exciting killer app. Dozens of universities are buying land from us or working with other inworld providers every week and the pace is accelerating. Seventeen of the top twenty universities in the US have land in Second Life.

To keep track with what’s happening in education in Second Life, check out the SLED Blog. A list of recent news stories are below

  • The Christian Science Monitor discusses how students from all over the world are able to study abroad through Second Life.
  • Government writes how government agencies like the center for Disease Control and Prevention are increasing their presence in Second Life to increase public awareness.
  • CNET reports that the San Francisco Exploratorium will be streaming live footage of a Solar Eclipse in Second Life expected on August 1st.
  • The Industry Standard reports that Cigna will try to make health education more accessible by creating its own island in Second Life.
  • discusses how the British Computer Society has launched an e-learning specialist group in Second Life.
  • The Dallas Morning News presents an article on using Second Life for higher education.

What makes Second Life so amazing for these things is the interaction between students and between universities. Voice is the key enabler. With a headset, residents can talk with other residents just as they would in the real world. With the 3D spatial voice in Second Life, residents can walk from one conversation to another as if they were actually hanging out before or after class. Serendipitous conversations just aren’t possible with other forms of online learning, teleconferences or videoconferences.

Second Life is leading the industry toward interoperability. With over $345 million invested in virtual worlds in this year alone, the lack of interoperability is going to quickly become a nightmare for users. We’re using our leadership position in the industry to drive the architectural standards we think will enable the metaverse to avoid the fragmentation that leads to slow adoption. Our announcement with IBM demonstrated interoperability between land hosted by IBM and Second Life. Other virtual worlds talk about being open – we are aggressively pursuing open standards and demonstrating results.


As you can tell, I am very excited about Second Life and the profound impact that virtual worlds will have on our lives. Like many of us at Linden Lab, I believe in a future where interacting in a virtual world is as easy as picking up the phone. As the leader in virtual worlds — in terms of numbers of users, user hours and the size of our virtual economy, revenue, profitability and brand awareness — we take our responsibility seriously. We will continue to invest in innovations that benefit our current and future residents as well as the entire industry. Two months in and more excited than ever! Thanks for your interest.

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138 Responses to My First Two Months at Linden Lab

  1. Thanks for this very thoughtful post.

  2. Day Oh says:

    I was just thinking about you, M! *Points*

  3. epredator says:

    A great post. I think this gets across the vast amount of possibilities that people are starting to see. As I have been saying the last few months in my interactions with customers to IBM, I am getting less “why would we bother” and a lot more “if I wanted too do x”. This fits very well with what you have documented.
    Interop is of course a key issue too. Whilst this sometimes gets obviscated by the “I dont want my WoW avatar appearing out of context in Second Life” the ability to move any data (with appropriate IP respect) from one place to another is important. We are already seeing the movements in traditional social media, and virtual worlds extend that web 2.0 need. Users should own their creations, wherever they choose to place them.
    Richard Bartle keeps referring to virtual worlds like SL as a place. He mentioned the other day that interop makes the place merely larger. This is of course true, but does not mean that in the conurbation of virtual places that each needs to be identical in function and form.
    Personally, without my IBM hat on, I am glad that you are looking to the future, with profitibility, but not losing the spirit that has been so engaging for so many residents.
    Finally, as I tell everyone at every turn, this is all about people. We are helping people connect in ways that have been filtered by the restrictions of technology.

  4. Taff Nouvelle says:

    I agree that SL ™ has a great future, and that some businesses are making good money, but the people who invested a lot of money in private islands to rent them out are losing out . this is due not only to the amount of land now available, look at the yellow on the map, but also to the disparity in charges due to VAT. When is this going to be adjusted. it means that in some cases some people are paying 25% more for the same service. OK, VAT can be claimed back, IF you make more than $50,000 US per year from business. Most users bought islands to make enough profit so that they could use SL without using their own money, as a hobby in other words, it has now become a VERY expensive hobby
    Before the nay sayers start with ” its your governments fault”, LL ™Voluntarily added VAT, they were not forced to do so, and they refuse to talk about this. That is my main complaint, as usual, LL just totally ignore questions that they dont like.

  5. Ann Otoole says:

    Do us a favor. Evict Millions of Us and Rivers Run Red from Secondlife for their defection to Google and adoption of the policy that user created content is a negative thing. Those 2 companies need to be driven from Secondlife for forgetting their roots. They would be nothing without SL’s residents. Time for companies like that to hit the road and not let the door strike their bumpers. They are “too good” for Secondlife and need to be over in the pedo worlds where their customers throng.

  6. Ciaran Laval says:

    So you should be excited but education institutions will not be led by the nose to bigger and more power hungry pc’s and you need to carefully consider how fast you grow the technical requirements.

    As for land, as you’re new and have posted a very nice positive blog I’ll let you off this time, but there’s something rotten in the state of Denmark on the front.

  7. Yukinoroh Kamachi says:

    I have to put an asterisk on 3; with this business model content creators are sort of part of the company but yet they’re like in a separate room from the developpers and they have to shout through the wall when they have problems.
    I’m part of these disgruntled people.

    It’s been impossible for me to fix thus sell my product (a flight assist, which took me 3 months to develop in my spare time in 2007) since havok4 release because of buoyancy bugs and I’m left on the ice with every server update, along with a total of 100 voters and 20 watchers for SVC-2013 and SVC-1792. Not counting my 100 or so customers (including a Linden).

    Could we AT LEAST get a progress report on the Jira pages !? From the long history of these bugs, “Assigned” or “Fix Pending” really doesn’t mean anything.

  8. Dnali Anabuki says:

    I find this very satisfying. LL was smart to bring you onboard.

    All the points you raised are excellent and true IMHO.

    As well, SL culture is going to start having a huge affect on RL culture at some point.

    Got my sims, just sitting back enjoying the ride to who-knows-where.

  9. Ankara Paravane says:

    I’m glad you have mentioned the latter four points in more detail on your post because as much as I suspect that point one was one of the apologetic sort in light of Mr. Kapor’s earlier keynote speech, the other points themselves are ones from valid premises.

    In particular, point two tends to prove itself everyday from what I’ve seen. Whether it’s someone’s experiment with the Havok engine in a sandbox or whether it’s someone’s attempt to tie web-based functionality within SL (such as the use of Google’s Translate functionality through its API to internal “universal translator” scripts), there’s always something that is adding value to the Secondlife experience directly or indirectly. It’s my own personal hope that in future iterations of LSL under the Mono VM that we’ll see improved functionality that goes to add more to that value added potential that scripters provide.

    So, keep up the good work, M.

  10. Darien Caldwell says:

    “We monetize unique users at many multiples of advertising based models.” O.o I owuld appreciate this sentence being translated into english please. 🙂

    Otherwise, an interesting post, even if I don’t fully agree with all points. 🙂

  11. Zito Kamachi says:

    Great post M , i agree with all but #3 not all avatars who invest in SL with real money creating objects get over many go under as myself. I’ve had 5 different locations for business were i start off well then when a larger business buys land close by selling simullar objects or clones of objects im doomed & force to move or just quit the business i spend more than i could make in SL go figure. Other than that i live like a multi millionaire & the best thing in SL is my bug zapper ( The Security Orb) haha

  12. Daten Thielt says:

    @4 i totaly agree with you but on a different level, the lindens are lowering prices ect on islands but what happens when some one puts their own sim down, most of us land owners who have been in since 2006 and payed for 10-15 sims back then have already lost 40% of our investment, and now when they get all this inter grid stuff working land will be even more overwhelmd but what does linden lab do? they manage to mug more people into buying islands that are going to be woth 0 in the very near future. and frankly the fact that not one linden will talk about what will happen to us who have spent so much just goes to show that they know this is comming and that they dont care. they should have warned people back when they signed up with IBM that when IBM has there own grid and everyone else like AT&T or whoever wants one. that their purchase that is worth 1000 will be worth nothing like all the land for sale in second life today.

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  14. I still enjoy the round of lolz here when i read about the virtual world expanding 45% and the PURCHASE of land is more accessible to to first time buyers. Yes indeed flooded with land to drive the price lower, devaluing the land of so many so a first time buyer can more easily purchase (scoop it up).

    However (setting everyones initial tier free 512 sq meters aside) the first bump up for a new buyer, with is now devalued land purchase is STILL the same 5 bucks US its been for sometime.

    Nah…it isnt inital purchase that means squat, you can grab a 512 m2 parcel for under 2000 lindens, that parcel will cost 1335 lindens each and every month (based on the linden exchange average of 267 per US buck).

    Over 16,000 lindens in tier for that 117 prim, 2000 linden postage stamp parcel.

    Next economic target…the value of the linden dollar???

    I am however glad to hear the strategy has worked… Kudos!


  15. Michael Fairplay says:

    All well and good but I’m hearing nothing about stability.Lag and keeping the Lindens out of peoples personal business and getting them focused onw hat they should be focused on taking care of griefers and offering tech support and back to point a stabalizing the grid.

  16. Brian Engel says:


    sorry, some of us must take the low road for humor. I’ll go back to sleep now.

  17. Please don’t be like Tencent T_T they monetize at almost every possible chance, up and including IM avatars, where if you do not make payment your avatar only gets to wear pants… and these clothes expire.

    Not to mention the QZone blogging service which needs you to install a custom IE plugin to view correctly… talk about interoperability…

  18. Hmmmm… just downloaded iTunes to my new laptop to watch the mp4 video of the inter-sim transport between SL and IBM’s OpenSim… but now the URL for that is mysteriously gone 15 minutes later…

    Probably will post a Windows Media Player friendly version in a little while…

    Really wanted to watch that as I believe this is one of those moments in computing history that people don’t currently recognize as a “historical” moment — similar to first time someone viewed a web page hosted on another computer not on the same LAN… truly the “birth” of the open 3D Internet…

  19. Bucky Barkley says:

    It is great to see an engaged CEO that writes to the residents frequently!

    Please find a CTO or urge the VP of Tech to post to the residents on a proactive basis. One would think that the lead tech person would write once a month or so without having to be goaded into it. They should be addressing: what are the tech initiatives towards stability, and how far along are they?

  20. merriwether magic says:

    As a senior citizen, I can loudly praise SecondLife for the ‘new life’ that I’ve recieved through this application.

    It’s not as easy to get around any more: I have serious health issues, and I’m slowing down. My physical self is wearing out, but not my mind. In Second Life, I’m able to pursue a new kind of challange, that of carving out a virtual life in an unique new form of brave new world. I almost feel like a pioneer, and perhaps I am, in a way, as are all of us. We’re helping to shape a new virtual content by lending our input to the mix, all while having a heckuva good time.

    Cheers to Second Life! It’s amazing!

    Merri Magic 🙂

  21. Marigold Devin says:

    Nice to hear you’re settling in well M… if you want a guided tour of MY Second Life, give me a shout. Willing and able to show you… and maybe shock you a little !!!!

  22. Salazar Jack says:

    “We monetize unique users at many multiples of advertising based models. ”

    What does this mean?

  23. M Linden says:

    Thank you all for your kind comments, helpful suggestions and yes your firm nudges. There is a lot here to digest, of course, but do know I am reading it.

    One comment related to stability and lag. I covered these two topics in an earlier post but let me repeat they are a major focus at the Lab. We have a series of “Technical Must-Dos” on our strategy road map and our team has been working hard on both topics and will continue to do so.

    In addition, we are working hard to improve — dramatically improve — the Resident experience. Check out our latest viewer release. It is a marked improvement over the previous release.

    Thank you again everyone.

  24. Salazar Jack says:

    Ah, I should have read further… this brings it more into focus for me:

    “Second Life is the only social media/social computing property where, at its core, user-generated content and the economy is the experience. As a result, our estimates place our monetization levels at 3-30x that of major media and social computing properties.”

  25. Argent Stonecutter says:

    Yukinoroh@8: It would be nice if we didn’t have to update our flight assists regularly, but it is possible to adapt to Havok 4. Honest.

  26. Graves says:

    It’s nice you’re making these posts, but I do wish they weren’t in such a sales-pitch manner, and I could refute some of the things said, but I’ll wait for LL’s action to speak for them.

  27. SirMarkus Kidd says:

    Another killer app I’m fond of is the automatic translator, such as X-Lang. Being able to communicate easily with people from around the world is -the- reason I decided to stay on Second Life, and though translators limit the users to text, they are very valuable tools.

  28. Yukinoroh Kamachi says:

    @26 : (sorry for the off-topic) Try out the second test script that I have posted on SVC-1532 while standing and tell me of a way to fix that ?
    That’s one issue, the other one with the two bugs is that unlike most flight assists, mine still allowed the avatar to move on all axis, so I can’t implement a movelock. I just need real buoyancy back, like in havok1. This is something I can’t fix with just LSL, this has to be fixed on the server side.

    Well if you have any ideas feel free to IM me in-world.

  29. Deltango Vale says:


    Yes, VAT is a HUGE problem. LL wiped out most of the European landowners by CHOOSING to REVERSE its policy of absorbing VAT as a global factor cost associated with new revenues from new markets. Electricity, infrastructure and labor costs vary around the world, yet these are not regionally priced. The same should be true of taxes like VAT.

  30. Anelise Demonge says:


    The 40% initial investment loss only calculates true if you’ve never made a single Linden from elevated over cost tiers or land sales revenue. Please, the math isn’t hard. The only ones that actually took a hit were the people that bought just prior to the decrease in prices. Beyond that the mindfull region owners have already made their inventment return. In numerous cases multiple times over.

    It drove the land sales price down.. you bet it did. And made owning land more acessible for the average SL’er. Linden tiers however remained the same. The one sad result of the lowering of the region prices was the burst of new Void sims seen popping up like weeds across the grid. And more sadly being used far in excess of their well noted capabilities and carrying average resident end tier rates that are.. more than sad.. try absurd.

    @ ML

    Lots sounds good. .very good:). With regard to the second quarter earnings however, a question. How much of that generated revenue was the result of the flood of reduced price new region purchases + revenue generated from the land sales auctions?

    Dittos #11.
    “We monetize unique users at many multiples of advertising based models.”
    Errmmm.. I know all those words and their meanings. I really do. But when I string them together in a read.. it.. … … 😕

    *waits for the understandable version*

    My two penneth worth.

  31. Sir Jake says:

    “our users are able to make real money and pay more than half of our fees”…

    Read:The users create everything inworld yet see no profit.

    um no, try 10%… if one has a good month. Besides, any business that has their bottom line being in the red every month is a failure. Could Linden or any company survive if it paid out more then it took in every month? Of course not. I think focusing on game play is a great way to brag since it is a great game!!! However if one seriously looks at the monetary numbers of business in SL is it not a selling point but more of a deterrent.It all starts as a new player learns they can make 2L$ for 15 minutes of camping… this ratio of work/time for money is a constant through out the business inworld. People often refer to the yellow on the map but there are just as many non-rented rentals out there again due to only one factor, money. This all stems from monthly fees.

    Since business in SL controlled and hindered by the monthly fees it truly blows the mind of the real effect SL could have on business in the real world if monthly fees were cut in half. Simply put, sell one item for 1000$ and 10 people will buy… sell it for 500$ and 50 will buy it. At 1000$ and no profit referrals will not exist, at 500$ and then profit referrals will got through the roof creating more businesses, more fun and a greater selection of everything for everyone.


  32. Ener Hax says:

    thank you for the post, it is nice to have a glimpse of you 🙂

    it certainly seems that sl is growing steadily and i am seeing this in the land sales for myself

    thanks for taking the helm and making sure sl stays ahead of the pack, i look forward to even greater successes 😀

  33. George Jay says:

    Sorry, but I’m on my way out of the game. There are several reasons.

    (1) The addition of all that new land has devalued my own land to virtually nothing. I cannot even give it away, and I paid L$12,000 for it. I’m lucky that I’m losing only $50 here, but I feel sorry for the land owners who paid thousands only to see the value of that investment drop by half. Remember: “don’t bite the hand that feeds you”.

    (2) The estate owner or LL can reposess my land if I don’t pay the tier without any returned benefit to me. This means the land has no intrinsic value. Any price I pay to “own” the land has no real meaning, because I don’t really “own” it.

    (3) The tier cost is really expensive; making it too expensive to live here. Clearly the cost has nothing to do with bandwidth or hardware costs incurred by Linden Labs, because the cost kepts going up, not down as one would expect with the Moore’s Law. $295/mo for 15000 prims is a grossly hefty premium to pay for the concept. When you can get “expensive” websites that offer a terabyte of traffic for $30/mo I had to wonder what the $295/mo was going towards?

    (4) SL suffers from several bugs which has frequently resulted in the loss of prims and scripts. These problems appear to be ongoing with no real “plan of action” to address them; if there is a plan, the residents are left in the dark about what they are.

    Going forward, I emplore you to clearly identify Linden Labs short, medium and long term vision, so that people can make decision about what to do next. When the land store was first advertised, it gave me the impression that was a revamping of existing tools, not a mechanism to devalue my land to nothing.

    Second Life is a good idea, but the vision isn’t the reality. It’s buggy and I have to pay too much to live here.

  34. isadorafiddlesticks says:

    Thank you for your post M, please never run out of energy learning, leading and helping the Lab innovate. Ever since you came along, the company seems to be moving more in an organized manner, it is still a long way to go though, but organized. I personally can’t blame LL for seeming to run around blind in many issues, but as said many times, this is a new kind of company, a new platform. New rules and protocols need to be created.

    Linden Lab is a pioneer and its problems are often unique, ever changing and evolving. I continue to hope that you will communicate often with us every step of the way. I expect someone with your expertise will guide LL and propel it from its position as being one of the worst in customer service, to being one of the best.

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  36. Aminom says:

    Why do sculpted prims have virtually no development priority, even for major bug fixes? It has been more than a year since the introduction of sculpts, and the technology has basically been unchanged. Fully fixed, and with a few minor additions, sculpts would be the most powerful building tool of SL. Instead we get the down time of a single developer, who spends most of his time working on _other features_.

  37. Taff Nouvelle says:

    I see M Linden has answered the points raised except the one that was baltantly ignored YET AGAIN, dont like the question, so LL just ignores it.
    Can you please answer the point about VAT
    When if ever , will you level the playing field so that ALL of your users pay the same ammount.

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  39. Connie Sec says:

    Some thoughts on “Land”
    SL land is NOT land in the RL sense. It is just server space and clock cycles being rented out. Computer prices fall and power goes up. Therefore, you cannot expect “Virtual land” to be an investment like RL land. In RL, land can’t be “made” is a finite resource, virtual land is not. Look at how much it cost to have a webpage on a server run by someone 10 years ago and compare it to now.. SL “land” is just a 3D webpage, to put it in simplistic terms. I’m afraid anyone that bought into “virtual land” as an “investment” paradigm, were duped by semantics.

  40. Rachel Darling says:

    M –

    I appreciate the post with your assessment of SL after two months on board. It’s nice to have some insight into your thoughts, and I encourage you to continue to post on a regular basis.

    As someone who is one of your “profitable” content creators, I am encouraged that you specifically mentioned a focus on improving the first-time user experience in SL. I see this as one of THE primary keys to achieving your goal of bringing more RL businesses into SL for communication and collaboration. I see many opportunities to leverage SL once the “effort of entry” becomes less cumbersome for new residents and business users…we have only touched the tip of the iceberg in terms of what is possible. I think of new ways to use SL every day.

    It is, however, also my hope that LL plans on leveraging their current residents’ experience and abilities to assist those new residents and businesses as well, and that you will allow us to benefit from the research and effort we put in on a daily basis. In other words, please stay to your business model, and leave us to content creation…but help us help make SL successful. Give us the stability to create content reliably, and, in a fair and unbiased way, give us the tools and the exposure that will allow us to reach the customer base.

    I look forward to hearing more about the company roadmap you alluded to, and to more posts about how we can work together as a team to continue to make SL and virtual worlds the next logical step in the evolution of the Web.

  41. Deltango Vale says:


    I think it fair to say that LL might have been more graceful in the way it produced additional ‘server space’ after marketing it as a limited and expensive resource 🙂

  42. What happened to the LL Trademark ultimatum? You know, the one where those who were not in compliance would be on the bad end of LL legal action?

    On March 24, 2008 Catherine Linden wrote a blog post which said:
    “If, after reading the Trademark Guidelines, you realize you’re using a Linden Lab trademark incorrectly, please use the next 90 days to change your use to comply with the Guidelines.”


    WE’RE ON DAY 122!

    If LL is going to grant amnesty to certain websites because the website owner and his friends are on a buddy system with LL then please say so. Many other website owners had to make modifications and some just shut down to comply with your new guidelines but the biggest culprit of all still remains. Why do some have to make changes and some get cake and punch when they are clearly in the wrong too? (pfft at least get an inSL logo for prims sake!)

    Follow through Linden Lab FOLLOW THROUGH!

  43. Christos Atlantis says:

    Thank you M, for taking some time to talk to us, we appreciate it. So many new ideas and ways to use SL will pop up daily as the client base becomes broader, I am looking forward to new exciting days ahead.

  44. Hecaeta Hax says:

    I for one have now issues with the prices on land since I did not purchase it to make money. I have, however, learned to atleast break even. Some here have thought only of their own self interests and not of the experience as a whole. I run my land as a co-op. Those players that wish not to make the investment can “rent” at a reduced rate in return for their tier donation to the Co-op. As for the VAT, I would like to point out that the folks in the EU still have an unfair advantage over those of us in the US since the exchange rate is 1:1.5. So you 25% only levels the playing field from my point of view.

  45. Taff Nouvelle says:

    @49, have you looked at prices recently? our cost of living is FAR higher than yours, one small example, you complain at $4 a gallon for gas, we pay $12, and all other prices are proportionately high, so NO, we do NOT have an advantage.

  46. Pingback: Shiny Life M Linden’s First Impressions | Shiny Life

  47. Vincent Nacon says:

    “Other virtual worlds talk about being open – we are aggressively pursuing open standards and demonstrating results.”

    So I guess copybot issue is not going to be resolved?

  48. Indigo Mertel says:

    @49 – C’mon Hecaeta, unfair advantage for the exchange rate? How can the exchange rate be an unfair advantage? It’s an advantage, period. There is nothing unfair about it. And, may I remind you that the US dollar used to be a far stronger currency in the recent past and Europeans for many years had to pay US goods at a higher price? If you want to blame someone for the low exchange rate of the US$ lead that to the US Federal Reserve and the US government, blame it on the huge public debt of the US, etc. The low dollar boosts US export. Should we call that an unfair advantage?

  49. Ripley Vlodovic says:

    hmmm this is great and all, though a lot of people are getting worked up over interop permissions, which i somehow dont understand (ummm if you can take it to another world, its perms stay the same?).
    and thats the end of the related but 🙂
    and the unrelated part >.<
    for some reason, SL (and SL ALONE) makes my router stop sending packets when i log on….. anyone else having this kind of problem and using RoadRunner? its been going on a week now and id love to hurt whoever made it borked 😐

  50. Indigo Mertel says:

    … forgot one thing. Hecaeta, you do have a point on which I agree with. We European users have little to complain about VAT. First of all, LL is required by international treaties to apply VAT. Second, we the Euro being so strong, the loss caused by VAT is largely compensated by the exchange rate. Everything costs less to us.

  51. Barb says:

    I appreciate you post M. Of course it is rosey and gung ho. But some issues…

    No one would argue that the “land business” in SL is an extremely important component of the SL economy..if THEY most important. Everything requires land. Now if LL wants to place the central importance of the SL economy on creation and sales to users, and have land free or lost cost to all…all serviced by and tier paid to LL, that would be fine. Just please LL, make statements regarding where you want the “land business” to go. Please state what you feel its importance in the SL economy as a whole! Prices first went up. Then open spaces were sold singly and could be standalone. Then 6 weeks or so later, prices were slashed. All of this came w/o warning or break in period. This leaves me to wonder is LL 1. Incompentent and didn’t know they were slashing prices in 6 weeks and didn’t plan that whole fiasco better or 2. Experimented on us, enticing people to buy, assessing the market then making another fast change.

    M, if you truly believe SL isn’t a game. If you truly believe and strive for it to be an “economy” we need more communication about what management’s vision is for the different arms of the economy.

    I have also asked Jack Linden directly on several occassions to address publicly the issue of grandfathered sim tier. Why do we not know the policy on this? Again is this incompentence, lack of planning or just stringing us alone waiting to drop the next bomb.

    Publicly state what Linden Labs view of the “land market.” This way we can make more informed decisions about input into this economy. And if you answer is that virtual land is just the canvas for other things to occur and you plan to make it low cost and accessible to all, say it. No one would begrudge you that choice. I just think many of us feel the tides change too fast and our input in this is to simply fill the coffers. Speak! Inform! Be clear! We have earned that right to know what the plan is.

  52. Indigo Mertel says:

    [… Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked. …]

    Frankly M, that is a half-baked strategy. The big problem with owning land is tier! Current tier fees are a killer! LL is profitable, we can only be happy about it but it’s about time that LL takes into serious consideration sharing a bit of that wealth with the users who contributes so much to that wealth: cut tier fees, please. They are unreasonably high!

  53. Knowl Paine says:

    Greetings M,

    If and when big boxes stores enter into the SL community who will make Wal-marts items?

    Will all the work be sub-contracted to outside developers?

    If a large box store opens how might this effect sales of resident created objects?

    I don’t believe in going backwards but it is important to understand prior misjudgments.
    The failure of the Wells Fargo endeavor is very distressing and warrants further study.

    I first discover SL while watching a television show called Market Watch. The Lindex was the topic of discussion.

    Second Life’s business applications need greater transparency. The degree of anonymity in SL leaves many residents short-handed. Residents have no way to confirm another member’s claims of affiliation or association with RL industries or educational services.

    IP rights to Resident created objects are still an unresolved issue. Residents need to have a greater understanding of common attributes and characteristic that are used to define an object as “new” or “unique”. Residents should not be miss-lead to believe that they have rights to every object they create.

    LL could post some of the basic information on obtaining a design or utility patent from the United States Patent Office. Any resident who does not have a “developers version” of the paint or modeling or text programs they choose to use do not have “Commercial Rights” to the features those programs add to their objects.

    24-hour community? I have be a resident for well over a year and have seen ONE Linden.
    You’re the boss M; these are my experiences, do with them as you will.

  54. Barb says:

    … Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked. …]

    OK..sorry….missed this the first time around….

    M, if you really think that the planned “worked” you don’t hear a thing from an extremely large section of SL business owners. You don’t see that people will be abandoning their sims in droves shortly. You don’t get that your income from tier when those abandonments occur will plummet. Honestly, and I really am not one to speak like in general, I’m embarrassed for you. It just devalued anything that you type here on in like an SL sim. Wow.

  55. Ron Crimson says:

    I’m probably going to be accused of being a LL fanboy again with this post, and if so then so be it… but I’m really tired of all the talk about VAT. No, I’m not affected by it as I’m not in Europe. Yes, I know you guys are upset about the additional cost. But you keep forgetting TWO THINGS: 1.) Linden Labs did not *choose* to impose VAT, they absorbed the cost as long as they could and then – *at the advice of their corporate lawyers* – started charging for it. Which brings me to 2.) The whole reason VAT is charged in the first place is because Linden Labs is legally REQUIRED to do so. You can tell them to reserve it ’till you get blue in the face, it simply won’t happen. If you hate it so much, leave your country and settle somewhere outside of Europe.

    Yes, I know that sounds arrogant, but I can afford this particular arrogance as I’ve moved around the world myself (though this has nothing to do with SL).

    On an unrelated note, “We monetize unique users at many multiples of advertising based models.” Yeah, I got hung up on that one too LOL 🙂 but I guess it means “We are able to run a business based on our user base that is vastly more profitable than a simple advertising business (based on targeting end-users) would be.” Corrections welcome, especially from Mr. M. 🙂

  56. Ron Crimson says:

    Ack. I wrote “You can tell them to reserve it ’till you get blue in the face”, that’s supposed to be “reverse.”

  57. A very touching and thoughtful post M.
    When Second Life wins, we all win, and by that I mean people that have not even heard of it yet.
    Thank you for standing up with a voice that can lead the Metaverse pioneers!
    – MRO

  58. I am glad to see so many good news. Some comments on my own, a 1.5 years user:

    -We must not think as business as the only or main involvement in SL. This is one involvement among others. My main activities in SL is about the on going building of a better world in RL (oh yeah, there are some people doing that, you may not hear much about it in the mainstream medias, but there is some need for this, I guess). This uses mostly social interaction, such as meetings, groups, etc. It also uses the ability of buildng nice things in SL.

    -there is still a need to inprove the quality of SL grid and viewer (chat errors, memory leaks in the viewer leading to freezes when the memory is full).

    -there are interesting features to add, such as importing full 3D meshes (not prims, even not sculpties). See Such a mesh can be created with softs like blender, 3DSmax, Gmax, etc. They allow for much more freedom in shapes, and they are much more lag-efficient (One mesh could replace 50 prims and lag like only 5). Especially we could create curved buildings nearby impossible to make from prims.

    yes the variety of uses of SL are nind boggling. Add to the list: building a dream world, meeting with like-minded people we would never meet otherwise, etc 🙂

    and the good new too is that LL is financially healthy.

    interoperability is a very important paradigm. The 2D interned worked because there is one protocol (http://) whic is so important that it was not changed since its inception. It also relies on a language, HTML, which changes brought more havoc than freedom. Similarly the 3D internet will really take up whe there will be a standardized protocol and adressing system: VRTP://world.domain.tld/path/resource
    where VRTP stands for Virtual Reality Transfer Protocol, and “world” for a grid.
    so your asociation with IBM is very interesting

    About competitors, they could use the weak point of SL (lack of technical quality, non optimized building). But this did not happened yet, even a “great company” made a flop recently with a very poor imitation of SL. It seems that nobody understood what made the success of SL, which are a small set of features: building in world, making groups, etc.

  59. Tegg B says:

    George Jay Says: “Sorry, but I’m on my way out of the game. There are several reasons.
    (1) The addition of all that new land has devalued my own land to virtually nothing. I cannot even give it away, and I paid L$12,000 for it. I’m lucky that I’m losing only $50 here, but I feel sorry for the land owners who paid thousands only to see the value of that investment drop by half. Remember: “don’t bite the hand that feeds you”.
    (2) The estate owner or LL can reposess my land if I don’t pay the tier without any returned benefit to me. This means the land has no intrinsic value. Any price I pay to “own” the land has no real meaning, because I don’t really “own” it.”
    Well I call BS on not being able too give your land away, unless it is estate land then price it a $1/m and it will be gone in seconds, that doesn’t work ask any of your mainland neighbours if they want it for free. And if it is Estate land, I fing it hard to believe the Estate owner won’t take it back for free as it’s really his land anyway, you’re just renting but coughed up a lump sum to earn the illusion you own it.

  60. One more comments about SL users.

    I too noted a slow but steady move from geek/gamer/griefer/BDSM users to more mainstream users. This makes of SL a much more pleasant and nice place, where people can be much more confident with each others.

    One of the reasons for this are good steps like banning casinos, illegal sex, and reinforcement of TOS rules about respecting other residents. This makes a much better ambiance into SL.

    But I think the main reason for this is the SL experience itself. For instance simple building and socializing make SL available for non-geek people. Also, the ability for social interaction first attracted a number of amateurs of violence or ugly things. But more slowly mainstream people are coming in, to build a large variety of things, and advanced people are getting in to make nice things.

  61. Mr. Little says:

    For those complaining that their businesses are not doing well or are failing.

    That’s life

    Most small businesses in RL fail as well.

    Start small, and grow when you can afford it. remember the lesson from the dot bombs that started to big and went boom.

  62. River Ely says:

    We don’t complain about paying VAT crimson, we complain about an unfair and uneven playing field biased to financial favor for one sector of the market.
    ie, Some users, (usa based) have a distinct financial advantage over other players, (non usa based). The correct implementation of VAT would mean that we all pay the same for , say, Land, tier, (295USD), however, the Lindens would get more of that from an America’s Based user, than they would a EU based user. The market would present a level playing field and eu people could fairly complete with USA people. As your not an a European, i doubt you will imagine it possible that your concept of fairness is the same as ours.

    M Linden raises some good points, 1, incredible diversity of buzzwords, 2 Ability to crow over failures as though they were successes. 3, ability not to see irreparable damage being doe to island owners by the massive influx of cheap worthless mainland.4. The tier difference of 100 USD between mainland sims and estate sim is a bias that is killing off investors daily. We are actually asking Lindens to switch off our sims as they are no longer a financially attractive proposition and we cannot sell them. I have tried to sell one of my islands recently and the usa based buyer wanted me to pay the tier, pay the transfer fee and give them 300 USD to take it off my hands, Guess what, that aint gonna happen Crimson. Sorry M Linden, your 2 months have generate for many a loss of confidence and a lower state of moral with a greatly reduced income generation.

  63. Rhaorth Antonelli says:

    Hi Mark

    Thanks for everything you are doing, and the well thought out and laid out comments, it was a lot to read, and digest.

    I am looking forward to what will happen with Second Life and where it will lead

    hopefully you will take us somewhere nice 🙂

  64. cosa nostra says:

    @67 Spot on !!

  65. Dirk Sporleder says:

    I personally think you have done more in 2 months than the other one did in how long? Things are running alot better, inventory issues (once my biggest complaint) have been reduced to an adequate (albeit, sometimes annoying issue, but I see you are working the issue), communications always seem to get better and better. My issue, as many other land owners in here, is that your organization (prior to you assuming the reins) changed land pricing (i.e. initial buying fees) with no notice, after some of us (namely me hehehe) bought land. I think that even though your organization stated that they would reimburse people who had bought land after a certain period from when you “decided” to change pricing, it should be extended to the ones who bought new islands a week before the “cut off date” since I know, from dealing with Corporate America (Which is what I deal with, and have dealt with for 20+ years) that those decisions are not made on a whim nor made a week in advance. We, the residents make SL, not the programmers nor the management there, for without us, you all would be programming for a defunct unknown company or asking “Do you want Fries with that Shake?”.

    To sum this post up, quit making off the cuff decisions about stuff, if you make a decision, look at the cost to benefit analysis of it (I am sure you have alot of folks sitting there looking at charts) and make this place better to work with. I am not “making” a living with it, nor am I paying for the land usage fees (which I will not get into now) with it, but it is a hobby and I and my friends enjoy it.

    We all, and I am not speaking for all in SL, enjoy it and you have done a remarkable job in the past two months as things have gotten SO MUCH better, and I personally thank you!!, but we ALL still have a long way to go.

    You guys rock and I still enjoying my almost year long stay with you and hope to have a few more with you as well.



  66. Thanks M Linden.. long and thoughtful post but I wonder how many of those women that you mentioned inworld are really women, not that it matters. 🙂

    First of all, the reason we send you so many general messages at once is because we love our virtual community in SL .. you are something like it’s president so to speak and this blog could be akin to a meet the press kinda thing.. anyway… here are my thoughts for the day:

    When you have time, please read the defamatory comments made by “Electric Sheep Company” and “Rivers Run Red” has to say about SL in this recent article about google’s new “Lively” program and also Second Life. They seem to have forgotten that they were once a “user” and now want to burn us all at the SL stakes of purgatory.

    They have milked all they could from Second Life and it’s users and client base and now move on to the next victim, “Google”. Please do us a huge favor and permamently exile them from our midst since they have publicly and deliberately denounced and stabbed us all in the back and will not stop until they drag us into the virtual mud of betrayal.

    Once again thanks for your words.. please do read the article. Seriously consider on reducing tier fees for islands. They really are entirely too high with all of the other competition out there. Have a nice day. .. if you need textures, please visit my inworld store 3’D Concepts*

    PS Couldn’t resist the plug.. ok here’s one more.. I do custom building. 🙂

    .. one more thing.. please send our regards to Phillip Linden.. some of us miss him as in the position he had. He seems to be a good guy who sincerely cares about the users of SL. Hopefully you are too.. Take care. 🙂

  67. Noisey Lane says:

    I see you have found the Rotation script M 😉
    Everything looks good with a spin on it.
    I’m sure there’s one there for Stop All Promotions there too. Seriously though, it reads like a sales pitch to non-players more than a “we’re-all-in-this-together” moment for existing, ‘monetized’ residents.
    Anyone that’s been here a while knows how diverse and mind-boggling we and our creations are.
    You talk of a business plan to die for as we watch in-world business die and land values drop due to LL interventions.
    You talk of killer apps yet to be created by LL or third parties. I call that vaporware. Hyping that which is not while fudging the current state of affairs.
    Any new virtual world could come along with a killer app that sucks the SL population away with cheaper land, better viewer, better scripting or any number of improvements. What then?
    Can we have some detail on what the Lab intends to do to retain its user base in light of interoperability?
    What will be the incentives to stay in SL?
    How will this affect the value of my creations or land?
    There are many questions and this blog post uses very large brush strokes to paint a warm and pleasant picture but it is fine detail we want so we can indeed move forward together with some sense of certainty and community. That may be our saving grace.

  68. Knowl Paine says:

    @5 I agree SL has to many groups that are anti-SL. They are in violation of LL’s community standards.

    @20 I also applaud M’s level of participation in the SL blog but would prefer that he spends his time meeting with board members of large financial institutions and industry leaders.

    @24 Oh, that’s M’s post….

    @41 @31 @4 VAT charges. I’m sorry but I thought America invented the inter-net???
    You should have got on the boat, BIG things happen here! American users do not need to share this fee we have contributed enough.

    @43 I sold 1024m for 15k. The value of land is relative to the quality of the content in that region. Regions with active residents have greater pricing stability. Things that work in RL oddly enough tend to work in SL. Business districts, Shopping, Residential, Industrial/Development zones. We also could use whole regions just called Adland. Imagine being able to visit a land filled with millions of floating rotating scripted particles……cool.

    Ron is a LL fan boy.

  69. sorry for the typos.. eek..

    When you have time, please read the defamatory comments made by “Electric Sheep Company” and “Rivers Run Red” about SL in this recent article about Google’s new “Lively” program They seem to have forgotten that they were once a “user” and now want to burn us all at the SL stakes of purgatory.

    Vryl Valkyrie .. owner of 3D Concepts .. remembering the value of loyalty.

  70. One more thing..this is in no way an attack on you.. just a few freindly words of advise which you can take or not.. 🙂

    Save the stastictic for the for New’s Year’s Eve. 🙂 Next time condense/shorten your post so it can be better understood.. don’t repeat yourself several times.. AND try to speak to us directly as if you were talking to a freind.

  71. Kyder Ling says:

    Just a word on Google’s Lively: It should be compared more so to IMVU rather than SL.

    Also: My only complaint about SL really has to do with land prices. I would love to have land to own and operate a small business or home with, but really, monthly costs and all, even with open spaces is just too much for anyone seeking to do so as a hobby. This will be improved over time of course.

    However: I must make note, about a year ago when I first signed up, I was used to being disconnected (Linkdead) often, having sims crash, and lag. But ever since I have upgraded my computer, I must say that most of my complaints have been liquidated. I do not have a super beefy computer, but I must say that it sure helped my SL experience.

  72. #20 – No offense intended to anyone who writes code for a living, but speaking as someone who’s had to edit their text, are you SURE you want a CTO to blog? *wink*

  73. Celestia Dreamscape says:

    Guys, get a grip!

    LL aren’t in this for the good of their heart (for that try OpenSim, which is getting better by the month – and kudos to LL for trying to embrace open standards).

    I make real money in SL, but I realise that the money I make is basically on the coat tails of LL. Hardly a great rl business model that you’d want to rely on to feed the kids every week.

    If you’re in SL to make money and don’t enjoy what you’re doing then go elsewhere. Seriously. It’s a GAME! And it’s free! Sure, you can pay money for land, but if you’re buying SL land to make money then you need to get out a bit more.

    Think about it – the fact that you’re bothering to reply to a blog post means you’re spending a lot of time on SL. Nobody is forcing you to, you’re doing it through choice. Oh, boo hoo that you’re not making money. Do you make money from other recreational activities? When was the last time you bought a computer game that allowed you to profit from it without also investing some extra time and cash? Or even at all?

    I’m so sick of people complaining about SL. Go out and get a real job or learn how to program and join LL so you can *do* instead of whining. Turns out that real money can buy Lindens 🙂

    Yes, VAT sucks (I have to pay it). No, the USD/Euro exchange rate doesn’t make a difference. But you pay your money, you take your chances.

    Personally (and you’d never have guessed it :p) I think SL has got better in the past few months since M took charge. And how many CEOs and businesses do you know that engage their customers like LL does?

    Don’t let the moaners put you off M (or any other Lindens). Sure, things could be better but as long as you’re enthusiastic and have half a clue then things will get better.


  74. Corvaire Wind says:

    One thing I am most clear of about SL and it’s citizens, is that we are the future. In that not so far future, SL will over shadow that of the invention of the internet in aspects of communication. In that far future the SL “Community” will not be looked as a technology but as a “Revolution.” I notice many folks missing that point, we are not citizens of germany, america, japan, australia, africa, etc., etc., we are one “Community.” A Community that will one day drive every aspect of social, commerce and political movement globaly.

    We are the Community of the future and will be the strongest revolution in the history of mankind. Be proud.

  75. Knowl Paine says:

    Your reading it to dude. And complaining about others complaining. So are you any better

  76. Celestia Dreamscape says:

    @80 Knowl Paine

    I’m not complaining and I’m not a dude. But thanks for playing 🙂

  77. Knowl Paine says:

    Your candor says otherwise…

  78. Knowl Paine says:

    I’m sorry Celestia, I was commenting on your comment and only after I posted did I look at your name. Sorry about that

  79. Ron Crimson says:

    River @ 67: Actually, I *am* an European.

    Knowl @ 73: “Ron is a LL fanboy.” Hehehe… And you know what, I like it that way ^_^

    Celestia @ 78: well said!

    And Knowl again @ 83: I could be mean and make a comment about you not reading posts before answering them… but I won’t. We’re all human, we make mistakes. 🙂

  80. Deira Llanfair says:

    Thanks for your informative post M. A business model that does not rely on advertising revenue is a good thing to have – I’m a Business Consultant in RL, trust me, I know.

    I also must be feeling rather mellow this morning because I will offer a bit of free business consultancy…

    the strategy that works in Q2 may well go belly-up by Q4…

    /end of free consultancy.

  81. Pingback: M speaks on the blog. (You are more mainstream than many assume!) - SLUniverse Forums

  82. Ok, so you are saying, we are going to stay on the BLEEDING EDGE and to hell with fixing things?

    Isn’t this the same speech we heard Philip give at the beginning of this year?

    Let me help you out with your future predictions. A company so “blind” to the needs of the users, so “out of touch” with the support needs of it’s customers, will NOT survive for long, using AOL as your example.

    You want to stay in the fore-front of the “Virtual World” business, might I suggest you stop practicing sloppy, shoddy, and LAZY Corporate Culture there at Linden Lab? I mean, every time I hear this speech regurgitated I wonder just how much you understand about your own business.

    Time to stop slapping HIGH FIVES there at Linden Lab Central, and take a very hard and close look at what your Users are saying and asking of you.


  83. larkum woodget says:

    If I was M I would wave my magic wand of power and tell the guys in the engine room to find a way to make all the ugly ads disappearable with mute visibility…

    (Mute object by owner key would be my preference)

    /me says, sitting on Santa’s knee XD

  84. Charlene Siemens says:

    “We monetize unique users at many multiples of advertising based models.”

    Does running it through the aforementioned Universal Translator help?


  85. Nicki Koba says:

    Greetings M

    First of all thank for you post, its wonderfull you are so informativ.

    you say:
    “user hours grew by 6%”

    But its not social or education there are doing this.
    I think Its the trafic bots, there is gaming the trafic number so they can be on top on the seach list ( on places )
    I think when there are 60000 inworld then its like 25% there are pasive bots.

    Exempel just 2 of many
    ECHo Vita sim use a skybox whit 75 bots.
    DragonFly Oasis sim use like 30 bots also in a skybox.

    Now I asking you M, Is the the Sl you want to see ?

    Solution as I see it or hope for:
    make the trafik like in www so its show hits and unik visit.
    that will be more fair.

    There are in forum a big debate about bots here in Sl, there can you get a feeling about how the most part of the users feel about bots.


  86. Ron Crimson says:

    ROTFL Charlene @ 90 😀

  87. Michaela Kuhn says:

    “…I notice many folks missing that point, we are not citizens of germany, america, japan, australia, africa, etc., etc., we are one “Community.” A Community that will one day drive every aspect of social, commerce and political movement globaly…”
    Yes, but with different laws at countries all over the world. Creating an global internet law is a very very hard stuff. In my mind nearby impossible in an age there people kill other people for stupid crude oil.

    Technical problems? Yes perhaps, someone talked to me that an onlinegame named “eve online” you can meet there more then thousand other avatars at the same time and same place without lag.
    BUT we are not interested in an further onlinegame. The unique selling point of SecondLife is to create 3D content and trade this stuff.
    Mass of high qualifiet freebies, reseller and last but not least content thiefs terminate the hours and weeks of work.
    RL business in secondlife? Currently it is nearby impossible in germany to win new businesspartners or customers for marketing campaigns in this system. Even the concierge of companies stopped phoning with a big smile if word “SecondLife” will sayed.
    My marketing mentor ever said: “Customers have one problem, they have a memory.” So it is a real hard stuff for solution providers like us, to praise a system where no one like to invest something.

    The peoples who are now in this system are the basis of this system, not the other big companies with marketing campaigns, not univerities with education programs. SecondLife Grid have one basically capital opposite to other startup virtual worlds. This are the people who created all the content and make the naked Linden Sims to blowing landscapes. Dont scare away this people.

  88. Hmm, reading this (in comparison to M’s firsts posts) I’d say: “Resistance was futile, you were assimilated”.

  89. Razrcut Brooks says:

    “With a healthy and growing inworld economy of more than $330 million annually, our users are able to make real money and pay more than half of our fees with credits from selling Linden dollars that they earned by creating valuable content”

    Who edits this? This sentence is mentioned twice in the above post.

  90. Linda Brynner says:

    Very interesting note.

    I’m very sure the business model of LL is very healthy.
    However a few stats have my attention ( I keep track Monthly ).

    Most avies I meet and see inworld are from 2007.
    This is odd, because I used to see many newbies and 3 – 6 months young. Since the trend of monthly population has been going sideways and falling, it could be the explanation.

    The growth of Premiums has come to a total halt and has been falling over the last months. I do understand LL has no focus on them as the benefits are almost none for be a premium since the “explosion” of Open spaces (these two trends correlate).

    The land mass has gone out of control, consequently many land developers have either redrawn of are in a pause state ( like me ).
    And many spaces in SL are deserted.

    The growth of user hours is just following the population growth; it’s not actually expanding to my vision.

    Login last 30 and 60 months is still the same as Dec. 2007.
    Actually online is still the same as Dec. 2007.

    I do like SL very much really, but some issues do have my concern.

    Btw, if SL is going to be an alternative for video conferencing is yet to be seen ( personally I have an opion about it ). Video conferencing hasn’t been a boring experience for me sofar actually and with a webcam and skype I have regular contacts in China.

    Well, all that said.
    I do see potential for SL, and I’m very keen to see the next developments concerning marketing of Second Life in RL.
    Marketing of the product ‘Second Life’ to the general public seems to be severly missed in RL actually.

  91. Resolved (TM) says:


    First of all thx to LL for improving their development and ops process since a couple of months. SL is definitely more reliable than it used to be. That is the moin point

    Now, as for some of the visionnary statements of LL’s CEO am a bit doubful.

    1) — Business performed in SL will always remain small biz, though of course the global amount of transactions can be growing. Still, there is no new business model here, simply — on an average, something like what individuals do when using E-Bay or alike.

    2) — I do not believe in SL becoming a place for corporate meets (and btw video-conf is something trashed since years). Large companies have their own private network, industry-standard tools (net-meeting, aso…) and phone hubs, all this working fine and efficiently. Cannot see the benefit for them to change their habits and way of work.

    3) — As for education the wording is very vague. In case we shall understand it as “learning and/or training”, there is no benfit for companies, administrations or institutions to change from e-learning industry-standard plaforms (with mature operational process) for SL.

    Just my 2 cents

    Anyway, thanks again for working tough and improving the main issue : reliability of the system 🙂

  92. Linda Brynner says:

    A Columbo addition ( 1 more thing lol ).

    For what I have noticed is that many people don’t want to come out as a user of Second Life.

    One the of the opportunities of LL is to work on that negative image being a silly game for people with too much time.
    All my friends and familiy know I’m a user, but many people don’t want others to know they are in SL.

    Will I tell it to my business relations? never ! ( at this time ).

  93. Malachi Petunia says:

    I, for one, welcome our new Philip v2.0 overlord.

  94. Medhue Simoni says:

    #44 Rachel Darling
    Echoing rachel’s nicely put comments. Many of my sl friends continuously encourage me to spend time outside of my building area and store to engage in more activities in sl. My answer. I love making stuff. The frustrating part is customers buying my products only to have the products eaten up by sl. Which results in hours of support by me to make up for this problem on a daily basis. I have much love for my customers and, as stated many times by them, they have much love for me, lol. That same love does not always extent to LL, sadly enough. Though i do have much appreciation for the better stability, this has much further to go.
    The start of 08 brought much turmoil for most of us content creators. This because of the total disregard of stability during the 07 year and the introduction of windlight into the system. This was a huge breaking point for sl but was sadly unrecognized until just recently, dispite the repeated shouts from the community. This was extremely troublesome mentally to all of us. I am a big advocate for not further limiting access to sl thru new innovations that cut out older pc’s. Keeping the platform open to as many people as possible is a big concern to me, as it should be for LL. Innovation is a great thing but making 10 people happy and hurting 1000 is just pure idiocy.

  95. Jimmer Gabe says:

    Reading this I must concur with Nicholaz at #94. Stop talking to us about SL-potential. Talk to your developers for some hours instead and give them what they need to debug, debug and debug. SL needs some serious refactoring – without it SL cannot POSSIBLY hope to deliver on the potential you seem to be seeing.

  96. Planvo Parx says:

    Well seems good thanks for the post
    Hope It Goes Well For You 🙂

  97. Ciaran Laval says:

    If we could pay tier inworld by Linden Dollars we wouldn’t have to pay VAT.

    However VAT isn’t a Linden Lab problem, Europeans should be complaining to their local tax office and European MEP’s about this.

  98. Christos Atlantis says:

    at #64 Try buying land in RL and not paying your taxes, it’s the same thing in SL. as governments need taxes to create revenue, so does SL, without revenue, how do you expect SL to expand, get better, add features kill bugs and have customer support?

  99. For a lot of us out here, you are our big hope that SL will survive it’s technological struggles (yes, I mean the asset server among other things) and gives us and our bussinesses a future.

    Just an idea: Perhaps you should lower your tiers for in-world based businesses (not the RL companies with a presence in SL) as you did for educational organizations. A lot of us provide services and products for our world at prices that are only a fracture of prices in Real World. Many an university (in fact all of them) has much more RL money than us, but pays only a fracture of the tiers we have to pay.

  100. AWM Mars says:

    Its good to see that only after a couple of months in the platform, you have picked up on the fundemental acheivements.

    It is also heart warming that to main focus now will be on gaining platform stability, something those of us that have been around for some years, have craved for.

    It is very difficult to expose the potential to clients, when they cannot even loggin, tp or rez objects. They start by thinking they are pioneers instead of creating/exposing their business to the next viable level of the internet.

    Gainning stability has to be priority one. It has gone past its ‘sell by date’ and is now at a very critical stage.

    The historic drama of gambling, sex with minors, either appears to have been resolved, or gone underground. It rarely makes press now and the balance of those things positive, that many of us have been forging away over the years to build, are now shinning through. There is no divide between SL and RL, simply because behind the avatars are real people.

    The real strength of the platform, is the many RL frustrated creative people, have now found a new canvas. One where they will not be judged by the colour of their skin, visual disabilities, gender preferences. Those that may not acheive or be recognised for their talents in RL, can now flourish, and are doing so.

    My note to you M, LL are the custodians, you have the power of a God, in this platform that effects so many peoples lives, and in some cases, their ability to communicate with the outside world. Utilise the talents of those that use this platform, seek those out that can add to the tapestry. Thinking that LL have all the answers, is too inward thinking.

    Overall, its good to have you as part of the community.

  101. Simeon Beresford says:

    I hope these progress reports continue and even grow more frequent. So far though they seem sadly lacking in new initatives. reporting rather on the success of projects instituted under the old reigime. What new initiatives there are seem not to be aimed at experianced users. with the exception of thedevelopers viewer project.

    i suspect more old timers are slipping away than you would like
    so how about prioritising something that will aid both recruitment and retention. Customer services.
    A transparent procedure in which people are promised and receive prompt consistant service within well publicised tie periods. with equally transparent access to an appeals procedure will do both.

    The use of Jargon like“We monetize unique users at many multiples of advertising based models.”

    does I think make make people suspect that euphiisms are being sought. Better to say we maake more money per person than we would from advertising. rather than let people assume you meant we squeeze every last penny out of users.

    As to VAT for non EU Computer services. Shrug I was aware it would cost me more when the lobbiests pushed it through in the uhh. eighties, that would be.
    It is a european issue for europeans to deal with, but if linden labs wants to absorb/ redistribute the cost I am not going to complain. though i suspect the rest of the world will.

    not sure what t “fair” has to do with exchange rates. If the dollar was worth more people would pay more for it.

  102. Aztek says:

    Although we all like a sounding board to gripe and complain about issues we feel are not being addressed, I think many also lose sight of the fact that LL communicates with their residents (customers) far more openly than any other similar company.

    For something that is growing as fast as it is, involving such a diverse group of residents & in a time where outside technology is growing just as fast, I still think they are doing a kick ass job. I am very grateful & pleased to see that even the CEO chooses to interact personally with everyone and has such an excited outlook towards the future.

    There are days when things go awry that I grit my teeth, but I’m still willing to endure the speed bumps we all sometimes hit. These still early days of SL will one day be looked back on as a historical time in virtual history. And thats kinda neat, I think.

  103. Shilo Clawtooth says:

    I stopped reading after Connie Sec’s blog. (Some thoughts on “Land”
    SL land is NOT land in the RL sense… etc…) Her thoughts, I believe, hit the nail on the head where SL land is concerned. There is so much else that could be said on this line of logic. Well said Connie.

    HOWEVER, there is apparently a possibility of profit and, at least, breaking even, even with SL’s obvious manipulations of us in the name of profit for SL. (I must say here that I am not lashing out at SL as they are in this to make money, as are all businesses.)

    What I wish to say here is that SL should lower the tier payments significantly, not to make lots more profit more available to us, who keep SL in biz, but to at least help us get closer to breaking even. SL, 300 a month for a region is just too much for either biz minded people, or hobby minded people.

    I would also like to see SL PUT A STOP to the stealing of other’s products. I have no products out there to be stolen, but I see the stolen products every time I log on, and it is despicable, disgusting, and should be an embarrassment to SL every moment it continues.

    SL, congrats on your success thus far. I enjoy my experiences here and do encourage others to join and become involved. None have taken me up on it in a way profitable to you, however, because of the initial and monthly expense required to either take a chance or have a new hobby.

    Looking forward to seeing what’s next!!!!

  104. Shilo Clawtooth says:

    I second Aztek’s words!

  105. Matthew Dowd says:

    I am intrigue by the voice statistics. I still find use of voice the exception rather than the rule for normal communication (the exception being lectures/presentations).

    However, as voice is often on by default in the viewer, and many non-voice users have voice switch on in order to see whether someone really is pretending to be a statue or is in fact just using voice, etc., if you are just clocking up minutes a client is connected to the voip servers as oppose to voice acutally being used, you will be getting a heavily overinflated figure (indeed some bots whose software is a modded sl client may even be connecting to the voice servers!)


  106. Richard Trigaux says:

    maybe a small suggestion:

    to mak business lands have larger land fees to pay, and private, cultural or other non-profit a lower fee. Perhaps this is too soon, or not yet practicable (are SL businesses really profitable today?). But one day or another it will be.

    The interest of this is to break the ready made image of SL being “for business” or “for consuming”. This is not ttrue for most users. Oh yes, we do shoppping, but it is never our primary intent. We do shopping for items we need for our in world lives. If we had not such a life, we would not make shopping.

    A cheeper SL involvement for non-profit or personnal use would allow for more people to come in SL, and it would be beneficial for everybody.

  107. Medhue Simoni says:

    Wow there are some great comments here for M. Seeing as the space still exist to comments further, lol, i will.

    Vat – Tho i feel for my EU friends, this is an EU problem. Not a LL problem. Others user should not be soaking up any of this cost. We have our own problems believe me. Those same forces are trying to create similar thefts of income around the world.

    Land – Personally i see this as the next really big problem. I watch as fellow sl’ers are abandoning land left and right. My own landlord is doing whatever he can to try and stay in the game. Its extremely hard for me to understand the whole concept of continuously releasing brand new land into the system, especially at those tiers. Tho lower tiers for content creators is very attractive to me, it would be yet another blow to existing owners.

    Business – I watch as new people with deep pockets jump into sl and unload huge amounts of money, seemly oblivious to the risk or nuances of the platform. Myself being 1 of those rl artist that found rl a difficult enviroment to be profitable, i entered sl and found a whole new world, as stated above by others. In rl i had very little discretionary income and had to tread lightly. Started out jumping from Money Tree to Money Tree till i had enough to rent a small space to sell my brand new exciting creations. That’s my humble beginings in sl. All my decisions had to be base on whether it was immediately profitable. Along the way i learned alot and now enjoy a very nice and comfortable existence in sl. Even if u have to money i would advise u to thread the waters as i did, simply for the experiences and the people u will meet.

  108. Kat Alderson says:

    Thank you, M, for another great post. Your time and willingness to communicate is greatly appreciated.

    I’ve been in world for 10.5 months and daily I am amazed by the things I see in Second Life. My first day in world, September 16, 2007, I crashed twelve times, lagged horribly, sank through the ground on a bad region crossing and got trapped in teleport limbo at least three times. And when I finally called it a day, I called my best friend Mike 2,000 miles away and told him to download Second Life immediately.

    Despite the problems I experienced, I saw the potential for us to promote our first life passions (Mike is a New York Times Bestselling author and an award-winning game/computer game designer, while I am a motivational speaker) and to reach our bases daily in a very comfortable and easy way. I knew the platform would improve. No one starts something as vast as Second Life without long term goals and plans.

    It’s nice to know I was right. 🙂 I’ve done no computer upgrades on my end, and a mere ten months or so later, my Second Life experience is totally different. As of today, I have been logged into world for four days straight, visiting 30-something sims and only experienced lag briefly at one very poorly scripted sim. I spend the vast majority of my time on the mainland, and haven’t hit a snag crossing region borders in a couple of months.

    I am not one of those people making US$ in Second Life, but Second Life has markedly improved my first life business. I’ve met amazing people, secured contracts through Second Life, and reached people across the world.

    @98, I agree. A lot of first life names do not wish to admit they have a Second Life. It’s the old way of thinking – anyone who chats is a lonely, desperate, depraved sex predator. While we know that isn’t true, Mrs. Smith and all of her cronies in Bean Blossom, Indiana thinks it is.

    However, Second Life is helping to change that attitude, and I for one would like to see that continue.

    M, I would love to see the Lindens highlighting more of the people in Second Life. While they have presented information on some “personalities/celebrities” who have deigned to come in world for a day, or a week, or once every other blue corn moon, it seems rather artificial. Why not highlight some of the first life authors already in world? There are many giving readings in world, as well as writing classes (everyone wants to be a writer!). Published writers have very loyal fan bases, and reach into demographics which most bloggers, television reporters, and radio announcers can barely touch. And they can do a lot more to change how the mundanes perceive virtual worlds than all the rest of put together. (No one really believes the media, anyway. They have lied to us too many times.)

    To the naysayers I say this: whining is unattractive. If you invested huge amounts of US$ into a virtual world hoping to make a quick and easy profit, shame on you! Learn a skill, develop something new and wonderful and earn back your money. B*tching and moaning doesn’t seem to be working out for you very well, and as the old saying goes, “The definition of insanity is doing the same thing over and over expecting different results.”

    If you’re worried about the stability of the platform, look at the progress that has already been made. There is no overnight cure for instability. It’s obvious to anyone who has been in world for more than a couple of months that things are improving greatly. Common sense says they will continue to do so, and your whining probably isn’t the reason why.

    And to those of you who are all offended because Linden Labs turns a profit, get over it! Profits, and high ones at that, are what fund the changes you so desperately seek.

    Lindens, keep up the good work!

  109. Resolved (TM) says:


    @115 — you said: “Vat – Tho i feel for my EU friends, this is an EU problem.”

    No. When I buy a product on I pay the price indicated for the item. Of course there’s an additional international shippping cost, but that’s all.

    If i choose to be hosted on a US server for a web site of mine, I pay the price the hosting company has fixed. Period.

    What can be the difference when I buy a bit of disk space for a virtual land?

  110. Richard Trigaux says:

    @98 Linda Brynner

    quote: “…One the of the opportunities of LL is to work on that negative image being a silly game for people with too much time….”
    (see the complete post)

    I also noticed that some people despise SL and say it is a bad place to go, or a bad thing. If this would happen only in France (my country), I would not bother at all. But this seems to happen elsewhere too.

    banning casinos, griefers, illegal sex, etc… was a good move. But it seems not enough to convince those who don’t want to be convinced. We are in our turn victims of all those who first despise a new discovery, and delay it until they are old and a new generation takes it. Anaesthesia, alternative energies, organic food, were all victim of this. I France we also have a prejudice as what is “virtual” is “not serious”, or it “don’t exist”, or that we must show only our RL look in SL!

    I am afraid there is nothing we can do against this.

    So just make fun of it.

    I DO say to everybody that I am in SL, in more as an Elf. If people are ok or happy with this, fine. But if they start to say they are concerned, I start looking at them very astonished: “what is the problem with SL” or “Everybody I know is in there” or “well, there is IBM and manpower in SL” and the like, and make thm wonder who is the fool.

    anti-SL discrimination can go very far, and I was myself banned from an astronomy forum for JUST posting a link to SL (to the space museum, a very interesting place) (see full story here the discriminator went so far as writing that I had become “tin foil hat”, but he did not dared to say why. But the reason was clear, it was my unique post in 6 months, with only the link and a short blurb on the space museum).

    So what to say? that anti-SL discrimination is, like race or gender or latino discrimination, basically a stupid thing by stupid people, even far before being an ugly thing by nasty people, who would even not like us breathing if we did only that. Don’t let our enjoyment in SL be stopped just by this.

  111. Resolved (TM) says:

    Well, in fact I do not care too much about VAT as of now. The only lil’ problem will come in case the USD gains back up towerds the €.

    I fear some 15% to 20% of the SL population will say goodbye. 🙂

  112. AC Pfeffer says:

    Shilo Clawtooth @ 111 : You too hit the nail on the head.

    As frustrated as users get, SL has advanced in almost every way. Millions of users are enjoying SL more becasue of that and well done LL for that. Land ownership is not quite right yet (expensive tiers for PI’s vs mainland) but they will hopefully resolve that.

    Secondly and more importantly – because its been so neglected so long : SL has turned a blind eye to product theft, and if anything is making the theft process easier.

    Its very obvious how big this issue is : as you wrote @111 – you don’t even have products to steal, but are sick of it!

    Thieves use alt accounts, and the biggest risk they face is an alt being banned. Big deal LL : to them its a non-issue as they create alt’s daily, and once stolen, products are freely distributed from other alts and friends.

    LL needs to stamp down on content theft : nobody needs these users in SL – really, what good are they? Force them to move their trade on to some other platform.

    Content creators have been complaining for years theft will kill the SL content. That time is arriving fast : theres a new copy process that copies EVERYTHING … read on …

    As for Copybot – that’s running alive and well and more advanced than ever in the newer versions. LL could have shut copybot down years ago, but hung onto the lame excuse that it can be used for legal copying too! Who cares, maybe 2% of its overall use is legal, the majority is blatant theft. Its like giving a 9mm to your 5 year old son to carry around and saying it can be used for good protection too. Texture stealing is even easier, and punishments (IF ever caught), light – while businesses suffer massive loss of revenues, and content creators just give up in frustration as their months of hard work are fruitless.

    As if that’s not enough, and thanks to open-source, there is a new technology being used now called ‘packet injection’, and hundreds of products have already been distributed illegally using this.

    This makes a FULL and exact copy of the products – all scripts are intact and working. But this is also not being shut down. Even worse, the creator is still shown as the original creator etc – so no easy way to see its a copy.

    So businesses can prepare to have their valuable content stolen properly, and devaluated, not just visually but functionally too. If your sales of expensive items have recently dipped a lot, there is a possibility this is the reason.

    Time for a business lockup and strike again? It seems thats the only thing that ever brought a reaction from LL … even though none of the promises they made were kept.

    Interestingly ‘packet injection’ suggests it ‘injects’ a stream of data into the asset server which should not be there. One wonders how much good that does the data integrity too.

    So possibly the biggest SL business opportunity is now for thieves : should they setup an offshore website selling illegal fully-working-as-original SL content for a fraction of the inworld price they will make a killing at SL businesses cost. One wonders what LL will do, probably nothing … until they find a way to steal and inject their own sims onto the grid!

  113. Taff Nouvelle says:

    @ 73

    VAT charges. I’m sorry but I thought America invented the inter-net???
    You should have got on the boat, BIG things happen here! American users do not need to share this fee we have contributed enough.


    that is the biggest load of BS so far, so everyone has to become american to use SL. thanks, but no thanks, not if you paid me.

  114. Richard Trigaux says:

    M linden, please add to the mind bogging diversity of uses of SL: having pie battles without having to clean the mess after

  115. Tree Kyomoon says:

    Great post M! I hope this year will see my island self generating cash, but the intangible benefits have provided way more than the price of the island for a few years to come. my SL experience may appear to have been a massive loss financially according to the tech stats, but its been a massive gain professionally.

  116. Zi Ree says:

    @117 Resolved (TM): This is not entirely true. When I ordered a piece of electronic from the US I had to pay 19 percent import turnover tax, whic conveniently corresponds to the VAT rate in my country.

  117. Jackson Mills says:

    SL has come a long way, and your post is informative and good. However, and there is a but, lag and prim issues still cause many problems.

    Music events have so much potential on SL. Yet with even a reasonable number of attendees, the sound and motion become a mess. The same is true for any event that draws a crowd.

  118. Resolved (TM) says:

    Sorry for this 4th and last post, off-topic once again, but since VAT in on “the discussion round” here. Also i do believe this ccan be addressed as a comment to a CEO post:

    1) — There was no VAT until mid 2007 (june ? july?). This means that if there was an ACTUAL legal problem with it, then LL was delinquent since 4 years, ain’t it? (yes it is). How could they hide this point to any California accountancy admin for all that time, even though not present on the stock exchange and examined by a SOX commission? hm?

    2) — in March 2007 the € was 1.18 USD, then jumped up to 1.35/1.38 in June same year. Any correlation seen here hm? I guess yes dear LL. No hazard profile here at all. Correct? (yes)

    3) — As of today the € is about 1.55/1.58, we EU members have no problem so then with paying VAT for YOU. Hope for YOUR IT REMAINS HIGH, coz the figures i gave just above are very conservative (the range should likely be more or less 25% off-game)

    4) — The resident that stated “Internet is American so…blah blah”… is both funny and ignorant. the early commercial web-browsers are european, CGI as well, etc.. May be he should stop drinking texan bourbon. 🙂

  119. Deira Llanfair says:

    Hmmmm – just felt I had to come back and say to M…

    You do realise that Second Life and it’s customer content creators are practically in a symbiotic relationship? Neither can survive without the other – and _this_ is the unique thing about the SL Business Model.

    So it would be appropriate, I think, if Linden Lab were really as concerned as the residents are about stability, land issues and content theft – and all the other things posters here have been writing about. Unfortunately, this does not always appear to be the case – and I do hope this is not so. We cannot help but meet with triumph or disaster together.

  120. Deltango Vale says:

    @4, 41, 49, 55, 60 67, 73, 105, 109

    LL CHOSE to apply VAT. The announcement was quite clear. The EU was charging LL and LL was treating it as a global factor cost (like rent, labor, corporate taxes, electricity etc., which differ widely across countries). Without any warning, LL changed its policy and – overnight – passed VAT onto individual residents.

    For UK estate owners, monthly tier jumped from $295 to $346 – an extra $51 per month – $620 per year. We didn’t know it had happened until it appeared – surprise! – on our billing statements.

    For entrepreneurs who invested in 10 regions (at a capital cost of $16,500), tier charges jumped from $35,400 to $41,600.

    If that same investor was intending to purchase 10 more regions, the capital cost (now including VAT) jumped to $19,400 with a concomitant increase of $6,000 in tier-tax to be levied on those new regions.

    Suddenly, the prospect of owning 20 regions was $15,000 more expensive.

    This is why European landowners fled the game with a sick taste in their mouths.

    As for financial reasons why LL should have continued to absorb VAT:

    1) it was being levied on new land sales, thus only affecting the net proceeds of these future sales.

    2) it was being levied on tier associated with these new land sales, again affecting only net future revenues.

    3) it was being levied on existing tier for European residents only, a small cost in the face of dramatic new revenues described in points 1 and 2 – as confirmed by LL in this very posting.

    If SL is to be an American game, no problem, but unless LL reverses its policy on VAT, it’s pure nonsense to pretend SL will become global in the face of massive regional disincentives.

  121. Taff Nouvelle says:

    once more I shall try to explain the problem that VAT causes.
    Private islands cost $295 a month,
    Rent from tenants on the islands is calculated to cover that cost, plus a few dollars profit.
    VAT is up to 25% , therefore the islands actualy cost $368.75
    that means an island owner paying VAT loses maybe $40 per month, per island.
    Island owners cannot raise rents to tenants, we must stay at similar rates to the rest of the grid.

    THAT is where the playing field is uneven, Rents are paid to us in $US the rents are passed on to LL, the money never reaches the EU, so WHY are we paying VAT on it??

    Now once again I will ask M to PLEASE comment on this point, instead of just totally ignoring all questions that he or LL do not like.

  122. Resolved (TM) says:

    @129 — “If SL is to be an American game, no problem, but unless LL reverses its policy on VAT, it’s pure nonsense to pretend SL will become global in the face of massive regional disincentives.”

    /me applauses

  123. Zena Juran says:

    M, just a couple thoughts on SL as a “killer-app” for corporate video conferencing:

    1. In order for a company/corporation to embrace SL as a digital tool for communications, it would have to fund the necessary training for their employees and incorporate additional infrastructure for IT and Training department support. Training just the key people in a small company of 1200 employees with a world-wide Sales staff and multiple world-wide locations would call for a huge investment of time and monies.

    2. The hardware requirements to use SL effectively as a communications tool are staggering compared to the standard desktop/laptop business-model computers that are commonly purchased. To even deviate slightly for graphics support, initially and for continued support, would be an enormous cost

    3. To effectively communicate on a business level in SL, the standard tools to share and edit digital information in-world such as documents, presentations, spreadsheets, graphics, etc… do not exist. This is a major prohibitive factor.

    These are just a few ideas that cross my mind if I were going to look at using SL as a communications tool for my company. These may be major issues for one company and minor issues for another. But the largest hurdle LL needs to overcome is the stigma that SL is just a run-of-the-mill online video game.

    If LL wants successful corporate businesses on its ledgers, LL needs to first be structured as a successful corporate business. And I have failed to see that in the last year that I have been in-world.

  124. Taff Nouvelle says:

    there are many technical office hour sessions in world, what about a business office hour where we can actually ask these questions, and get some answers???
    I know this will never happen, there would be too many questions that LL are not willing to answer. but I can dream.

  125. Resolved (TM) says:

    Yes we can dream Taff 🙂

    No they won’t tell nothing, since there is NO LEGAL ISSUE IN ALL THAT, simply the fact that the € is high.

    Just wait for a USD raise (it’s always been this way since Bretton-Woods btw) then they can live back in autarcy… until their next “so -called” crisis 🙂

    But well, that is not LL – that is a world-wide financial mechanism, well-known.

  126. Curtis Dresler says:

    OK, I’ll bite. Ron was close, but phrased it a bit nicer than it really is. To monetize users is a blunt marketing phrase that means they have found more ways to make money off of site users (technically, it could mean a way to make more money using the same method, but that is less common), so they can make more money off of the same number of users than the other model. An even blunter way of saying it is, they have you coming and going. There is an even blunter phrase, but I don’t think I can use it here.

    I got a mild burn mark from the land pricing, but more and more believe, as I visit the OpenSims and near OpenSims, is that it is not a correction but a change in pricing algorithm – just slow and subtle. Get used to it – the myth of ‘land value’ is going and the truth that it is all about monthly fees is here. With the open grids growing larger and SL eventually joining them, LL will not compete against people buying their own server, getting fiber and joining a grid. It will be on monthly fees and, presumably, ease of entry and quality of experience. We’ll see – IMO entirely possible and they deserve praise if they pull it off even a bit roughly. Yeah, some users will go and even more will be angry or irritated, but it isn’t cookies and milk to change pricing formulas in mid-stream (I really wanted to mix one more metaphor, but don’t have the time…).

    BTW, does anyone know what happened to Deepgrid? The host web site says they are redoing the web pages, but most of Deepgrid seems to be out of reach.

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  128. Dinohunden says:

    To £ 136
    The only way to get the US$ back up is to gain the confidense of Europe…. That seems like a long shot, as it as at the moment…. Perhaps Obama and a few less war, they you like so much would help… Here in europe, we’ve HAD it with this bullyboy thing, you’ve going on. Don’t ask me, ask France England, Germany, Italy, all major countries are fed the BEEB up with you, so donøt push it over to Europe, that your economy stink!

  129. Esther Merryman says:

    Nice to see a CEO regularly posting to the residents, updating them on a wide variety of issues.

    Secondlife users are certainly far more diverse than many of these users assume, as are the uses second life is put to.

    A typical example is shown at post 21 by merriwether magic, this to me really highlights where second life really becomes a valuable asset, and I am sure many users get a similar uplifting sense, for a variety of different reasons.

    However Linden Labs may well have an enviable business model, but this is not the case for all users.
    I have lost count of the number of times, new members have contacted me asking how do I make money, assuming the virtual world is paved with gold! LOL we all wish:-)

    The truth is yes money can be made and at times, when feeling in the mood, I can turn my hand to building, texture creation and make a few lindens.

    But alot of us build for fun not profit, some friends party every moment of their virtual existence, living their second lifes to the full.

    There are large land owners investing real life money to turn a profit in Second life Real Estate, and yes lowering land prices has affected their takings, but on the whole they must be coming out on top, to carry on doing it. The only losses for land dealers was at the point of the land drop, and any sensible business model would have taken that potential into account.

    There are criminals exploiting other users by stealing designs or running adfarm extortion scams like Primlands for instance, yes the uses and users of Second Life are certainly very diverse.

    This is where Linden Labs fails us though as a population, ABUSE REPORT someone and LL either completely ignore the problem with no response or wade in heavy handed with suspensions etc.
    Without actually investigating the issues.

    Take for instance Primlands and their Adfarming something I personally feel is immoral and should be completely stamped out.
    February LL announce ADFARMING banned, now July still going on all over the mainland Primlands cutting up land all over the place laughing as they steal upto 40$ for a 16sqm plot from other hapless residents (See Sarah Nerds Blog on dated 17/07/08)

    On the other hand a new member acting silly being antisocial gets suspended for one day, what did that achieve? probably nothing either another avatar was created to get round the suspension or the user left without actually experiencing any of the things SL has to offer.

    Dont get me wrong I dont condone antisocial behaviour.
    But is an avatar being silly in a sandbox as reprehensible as an avatar extorting literally thousands of USD from a large number of normal users, just trying to create an idyllic location to call their home in the virtual world?

    Yes I am all for diversity, it is one of the attractions to Second Life but do we need to encourage and harbour criminals?

  130. daleinnis says:

    Very nice to see this level of communication with us residents! My main reservation about the post concerns how utterly business-oriented it is; I mean, sure, SL has lots of possible business uses that are really killer, but I’d like to see the CEO also appreciating and acknowledging the potential for creativity, for individual transformation, for silliness and FUN.

    “2. The diversity of use cases in Second Life is mind-boggling. If you were able to read every story around the world about Second Life, you’d see a tremendous variety of use cases presented – e.g., medical research and treatment, education, marketing, customer support…and the list goes on.”

    It would be good if a list like this also mentioned music, art, dance, social interactions, international friendships, discussions of important world issues between people who would never otherwise have met, creativity, imagination, and so on. To my mind that’s really where the transformative power of SL lies.

    Oh and… no one should ever say “and the list goes on”. No one. Ever. Just sayin’… 🙂

  131. Barb says:

    i think they were joking about the inter-web is american thing

    Land makes the world go around…until LL says it is worthless as a commodity and only will be pumped out for tier income for LL we will be debating it.

    LL make a statement! You have the right to do as you see fit. It’s your company. But tell us would ya!

  132. Xon Emoto says:

    Great insight, Mark. Thank you.

  133. shockwave yareach says:

    SL has improved dramatically in the past couple of weeks with the new RC. Most impressed.

    Now, when you distribute the databases so that every 20 servers have their own redundant DB boxes instead of this horrorshow single point of slowness you have now, then you’ll be able to scale and grow again.

    I do applaud the improvements that have been put in place the past couple of months. Things are getting better now, and you clearly have a “make it work” approach that SL has sorely needed. Your willingness to talk to the proles is another plus as well. Keep up the good work and hope to see more improvements in the months ahead.

  134. @100 Bryon Ruxton who said”
    “I would expect a CEO to talk about what advances are being made rather than a PR stunt about the possibilities this platform offers, which most of us already know.”

    Ditto, dood.

  135. Marianne McCann says:


    A great write up, no question. May I suggest a #6? I think it’s important to understand the diversity that is the culture and community of Second Life. This drives the uses you mentioned in point #2. You have an amazingly colorful userbase that creates and moves in many glorious and colorful ways.

    Consider the Relay For Life, where tinies, elves, and Goreans walked and cheered with innocent child avatars, steampunks, and yes, even the “Brandies” and “Clints” of our shared world. Our demographics inworld are widely varied, and worth both noting asnd celebrating.

    On another issue, while I am far from a detractor of it, thoguh, I note you have pushed heavily on the voice software from your third-party developer., even in referring to making SL as easy as “using a phone.” I feel it worthwhile to note that some may never use SL Voice, and others (like myself) might use it sparingly. Many of us here are using SL in an escapist fashion, to one level or another, and find the use of voice to break our own personal “fourth walls.” Again, it is the diversity of the SL community at work — one can never assume what the majority of SL users will want without being disappointed.

    Meanwhile, onward and upward. I wish you nothing but success as you attempt to spin the many plates that make up Linden Lab and it’s core products!

  136. I look forward to the growth that Second Life is about to experience 😉 Thanks M; I hope you command Second Life into the next millenia…

  137. Edward Artaud says:

    Thank you for putting the in-world economy and content front and center again, it’s a great relief to see that once again understood by LL as the unique proposition of Second Life. Not sold on the killer apps, particularly videoconferencing – the cost of videoconferencing has dropped to zero with cameras now installed on most laptops, free software readily available, no expensive 3D capabilities required, and no learning curve for users. I like your thinking about comparing to the social networks – the killer app for social networks was music applications – listening to music in SL is a very popular application, if it were made easier for the average user to stream their music libraries to their friends, you’d have a much wider consumer audience flocking to SL.

  138. I confess, I sold lands to the PrimLands people once… they evidently are willing to BUY land at market-level prices, even if offers to buy it from them are laughed off. (Unfortunately, I don’t know who exactly bought it from me, since PrimLands bought from my family group, not from me personally.) The PrimLands people themselves are a harmless annoyance: their land just sits there unsold for months or even years at a time, usually with no land lines or ad towers on it. Aside from sometimes interfering with terraforming and building, their ubiquitous parcels are not actually much of a problem.

    The adfarming thing is a little overblown, but some of those guys are a blight on the landscape, and I am doing my bit to push back against them. I do think the tier fee structure should be changed, although I understand the politics behind not changing it. If it is changes, adfarming could be discouraged by making it more expensive to hold many small parcels. Right now an adfarmer can hold over 4000 16 sqm plots, in over 4000 sims, for the same tier as someone who holds a single mainland sim. That’s kind of silly… the adfarmer is using up lots more bandwidth. Even a legitimate small plot holder (e.g., the people who put servers on a single small plot on as many sims as possible) use more bandwidth than someone someone who holds a single mainland sim.

    A much simpler change would be to forbid groups with no visible paid members from owning land. The “PrimLands” group, for example, has only one member whose identity is visible to non-members… and he is a non-paying SL resident. That’s ridiculous.

    BTW, the new viewer is much better… and in general SL does run better now than when I was born two years ago, even with a population which has grown tenfold.

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