Puff and Circumstance

 The piece on the Guardian by Glyn Moody about "Second Life's New Ruler" stirred the usual bland reaction across the blogsphere. Some called it positive, but really it is just more of the same old puff and circumstance about the virtual world. Another bit of coverage with more of the rehashed noise from Kingdon that we have seen for the last year since he joined the wacky world of Linden Lab. (btw Glyn---Kingdon started on 5/15/08 so, is a year in a job really make someone new?)

Generally I have not been too interested in following the spew news from Linden Lab. It seems to me that largely no one cares about what the Lindens are doing or where Second LIfe is headed. It's a marginalized and eccentric thing (game or platform or technology??). Most residents just take what they can get without much hope that SL will actually be anything more than it currently is. Which is not nothing btw. There is still a lot to do in SL (check our cool enough directory of places here).

Yet, there is still a bit of passive curiousity about what goes on at Linden Lab. Since the openspace rip-off, LL has locked-down all information about anything that would expose the impact of this mess. No real statistics about the "land mass" or new user retention are shared. We can only guess that it is because there is no good news to share--so LL seems best to just shut-up.

So, the noise is the same from Kingdon. What continues to dismay me is how the "press" sucks up the puff and just tosses it back out. The Guardian aspires to more than just reccycling press releases--but once again in the case of the virtual world delivers whatever the technocrats put forward without challenge.

Of course the normal PR process is at play here. Kingdon comes to London on a "tour" and their dutiful PR agency Lewis PR went out and tried to secure some meetings and some coverage. They would also carefully prep each writer on what the story is, while carefully avoid sensitive topics. But should jouranlists dig a little? Gly Moody just took the whole thing hook line and sinker. Aren't there any curious editors over at the Guardian?

A couple of things that even a journalism student in a high school might have asked--

* says Kingdon: "I see what a phenomenally brilliant business model Second Life has. If you're a social media property today, your biggest challenge is figuring out how to monetise it. Because the experience and the economy are so closely linked, Second Life doesn't have the problem that other social media properties have." Which begs the question: what is this business model really all about? LL sells virtual land. So if this is so successful than how much land has been sold in the last year? How much land is being abanndonned? What are these other revenue streams that facebook, twitter have not been able to make work? Second LIfe also has tons of other problems that Twitter does not have--like a massive IT infrastructure. They have something like 5,000 servers to support 640,000 "claimed" users. Ha that don't look too scalable Glyn.

* Glyn cites: "Altogether, he's hired 100 people since joining Linden Lab last May." Gee that would make Linden Lab one of the few companies in the entire world that is growing its staff base. Er, why? And what about the people that have left LL? Is that 100 more people or just new people? And...why does it take 100 new people to make the system 50% more available? Is it because the underlying architecture and deployment is such a giant mess?

* Concurrency. So is 86,000 concurrent users good really? How does that compare to other MMOs? To Xbox? Sony Home? And what is the benefit to other users about this concurrency? How many areas do the average avatar actually visit? Is it just one or two? Or is there a great need for movement and interaction across the sprawling grid? Or is concurrency that only thing that is growing--so the only piece of up news that Kingdon can toss out?

*  Kingdon tosses out: "I'd like to see a Second Life that, instead of 640,000 active users" - today's figure - "has 6 million active users." Well, first where does this number come from? Users must mean unique humans access the system. Active users should then be people that are doing something er...active like shopping, engaging in events of some sort. How does Linden Lab get to this number? There have been reports of 10% of the sessions being bots of some sort. How much of that is inside the concurrency? Is it the same 10% or is it 50%? What is Kingdon's projection of the porno grid in relation to the these numbers. Will the porno grid by 80%  or 10% of the "active users"?

* Here's another unchallenged statement: Kingdon cites two main reasons for companies' renewed interest in Second Life. "One is that a younger generation of worker is very tech-savvy, accustomed to using very flexible tools to communicate, collaborate and share. Then there's the tremendous pressure on businesses to be eco-friendly, not to travel as much and not to build physical buildings." Well, what supports that there is renewed interest? What tools are there in SL that are flexible or better than skype? Is Second LIfe targetting younger users now? What is the new median age for users? Where are they seeing more avatar creations by country?

* Then about the inside the firewall product Moody says: "This allows companies to run a Second Life server on their own intranet: they can still connect to the main Second Life world, but it provides them with a virtual space where confidential discussions can take place." Well, there is no public factsheet about this product, so how can the Guardian say it works this way?  Exactly what "server" runs on the intranet? How are assets managed? What about avatar control (logging) inside and outside of the firewall--there are lots of questions here for sure.  From the Second LIfe blog we get: "Yes, this is a server solution that is completely disconnected from the main Second Life environment with all of the rich functionality in the box." This solution also has a lot of competitors, so why is the SL version better? How many companies are using it etc...(some info is on the SL blog now).

* finally Glyn--you let him off with this comment: "And we're a very nice and profitable company." This is something we have heard Kingdon say for the last year. So how profitable? $1? How much revenue? What is trend? Where is growth areas? What about overall investment in gettng SL to where it is? What has been the total cash investment in the business to date? What does the balance sheet look like? Certainly as a private company Linden Lab does not have to disclose any of this, but if it is a major statment to validate the offerings--well I don't see how a journalist can just reprint such a  statement without back-up facts.

But then again who really cares about where Linden Lab and Kingdon are headed? He looks about as bored with himself in the photo as Glyn and most of us already are.

 

 

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Comments

Rightasrain, you're a real

Rightasrain, you're a real mensch. I thought before, you having been featured in that syncophant Hamlet Au's blog, that you were just another SL hanger-on, but I guess I owe you an apology. You're one of the good ones, man.

2 world, ty man. This is

2 world, ty man. This is chapter one, our story continues... cu on a grid!

Newswise, stuff that gets the

Newswise, stuff that gets the most pageviews are new release candidates, and anything at all that Linden Lab is doing. Hirings, firings, policy quirks. The least and most trivial thing the Lab does drags in many times the readers that the most awesome thing SL users are doing. It's a bit sad, because awesome stuff is... well, awesome.

Oh, the 10% bots figure that gets bandied about comes from my figuring about a year or so ago. As far as I can tell, that figure has been dropping for a while (ie: Percentage of the active users that are bots has been declining).

Guardian interview

"Hook, line and sinker”? I don't really think so. I framed the piece by a paragraph of pure scepticism, pointing out how the hype had not been justified, and how staff had left. Lewis PR certainly didn't try to “prep”: they just offered the interview slot. They didn't even know it would be for the Guardian (I didn't either, until I pitched to them.) I didn't receive any press materials beforehand: I got everything off the Web, so they knew nothing about the questions or the angle.  Bear in mind, too, that I had just 1000 words to fit past, present and future in - and that the Guardian audience is not interested in deep technicalities.

The point of the interview with the new CEO – and I think he is still new in the sense that he's finally had time to *do* something – was to explore whether Second Life had moved on. The figures that Kingdon gave were consistent with a business that is finding its feet to the extent of being profitable, growing and takng on staff. Yes, that's unusual in the current climate, and that's the point.

I couldn't ask for *details* of the profits, because Linden is a private company, and doesn't disclose them. I have no way to check his other figures, but I don't believe he would be so foolish as to make claims that weren't eventually substantiated – these things come out eventually, and he'd look bad or even fraudulent to investors and customers.

The concurrency figure can't really be compared with other MMOs because SL operates in quite a different way. Whether you think 86,000 is big or small, good or bad, depends on your viewpoint. What Kingdon is claiming – and will emerge – is that the numbers keep going up, which is a test of the scalability of the system. Active users were defined as those spending at least one hour in-world – but without specifying what they do there.

Kingdon's “unchallenged statement” is his analysis of why businesses are turning to SL, based on his claim that more are turning to it now, but *not* for marketing purposes. Again, whether or not they are indeed using SL in this way will emerge soon enough, so I'm inclined to believe what he says.

As far as the “inside the firewall product” is concerned, I was wrong in writing "This allows companies to run a Second Life server on their own intranet: they can still connect to the main Second Life world, but it provides them with a virtual space where confidential discussions can take place." That's what IBM's behind the firewall project does: we were talking about this before Kingdon spoke about this other project, and I assumed it was the same. In fact, this alpha release of the product does not support teleporting to the main grid; later versions may, although I get the impression that Linden aren't too sure how to handle some of the issues.

For comments on details of profitability, see above. I left the reply “we're a very nice and profitable company” because it was obviously vague and open to interpretation. But the fact remains that Kingdon claims Linden is profitable, and has more money in the bank than was contributed by investors, so at least the picture he paints is consistent. I would hope to do another interview in a year or so's time whether all the predictions worked out, and whether things are as rosy as he painted.

 

I agree with the newness of

I agree with the newness of Kingdon. One more year, and he'll be established. Given the Lab's cycle-times we're only just starting to see the first results from him insofar as they affect operations.

Guardian Interview

    I think it would be rather diffficult to get any specifics from Kingdon at the moment, and yes, they took a blow from the OpenSpace scandal, so their metrics will be stuffed for quite a while. Also as no one else has any of this information, there is no way to cross check anything he says.

I'm quite sure I heard Jeska Linden say over a year ago that LL was in profit, so I have no reason to think it isn't.

My only real question wold be what defines " companies' renewed interest in Second Life. ". The only companies I have seen are those that are very technical such as IBM, and they are working a lot on OpenSim. Generallly I suspect IBM has the main interest in getting the technology working and as Open Source to annoy Microsoft.

Staff turnover is quite normal, but then I have seen more leaving in the last 12 months, than in the few years preceeding.

 

Glyn--thanks for dropping in

Glyn--thanks for dropping in to reply to my... er...comments on your piece. You may have sensed some frustration on my behalf regarding the comments about Linden Lab. I hope you can appreciate that we are actually trying to run a little business inside of SL and find dealing with Linden Lab to be very difficult.  While they talk about making profits--we find it to be an unprofitable association with them. We would love to see serious growth as Rezzable should be in position to benefit from this. We see a lot of mixed messages and confusing posts on their sites. We hope that the press actually can get some real information out of them.

Regarding some of the figures quoted, I still think Guardian has an obligation to fact check these before printing. People will take your reporting it as credible. For example--the 640,000 active user number. This is an interesting number. I have to assume a user is a person and not an avatar. So how does Linden Lab really know this? And is 1 hour inworld once really enough to be called active? It is their wacky definition really. They could easily show unique users that get off the orientation island for more than 1 hour in a month. According to their statistics more than 1 million residents logged-in during the last 30 days.  It is really hard to know what to believe.  Second Life ran up an epic amount of hype by touting millions and millions of registrations when in practice many never even got to the orientation islands. The user growth was the big story in 2007 but in fact it wasn't anywhere near as dramatic as presented by Linden Lab and reported in various publications.

On the land growth that had been the story of 2008 -- this note on the SL blog tells it all: "Private Region data has been temporarily unpublished while we correct our reporting mechanisms to account for the recent addition of Openspaces and Homesteads. We apologize for the inconvenience."

Regarding IBM--they have an interesting behind the firewall project--but it is using Opensim. It is a project for the fashion research institute. Probably they have other experiments to study the technology using the SL services. But I think IBM doing some research is not as interesting as their selling a solution to one of their customers.

On profitiability, well of course the first thing to say is great for them really. But what is their current trend? Seems like a lot of potential fall-out from the openspace fiasco as well as general impact of the economic conditions in the world. Add that to a lot of new people and you gotta wonder just how robust their business model is with only 8 alpha inside the firewall customers as a the main new revenue stream. Kingdon has been selling the nice and profitable line since he first started. So if there is more revenue than that is in fact news these days. If there is less revenue and higher costs--that may be news about the dice roll that is being played out now.

 

 

@ Tat -- if bots are

@ Tat -- if bots are declining then why did Jack make a big post about censoring them?

Why does Jack make a post

Why does Jack make a post about anything? You'd have to ask him. Though he doesn't mention censoring them - or even taking action against them at all.

Plus, I don't believe that the Lab knows whether they are declining or not. This appears to simply be the next hot-button/daily-complaint issue on the checklist.

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