Hey Jeff, its been a while since we talked, way back in the day when you took an early stake in Linden Lab and Second Life.
And thanks again for the money you sent our way back in 2006 – I guess it was a little early to do that “going mainstream” thing.
But we’ve been thinking about you. A LOT.
Actually, its been kind of tough not to let the cat out of the bag and it’s kind of surprising how few people have picked up on it. But I’m sure you figured it out – you’re a smart guy, and all you’d have to do is glance our way now and then (you’re getting the shareholder updates, right?) to see how much we’ve been doing on your behalf.
Now, we know you have a lot on your mind what with that whole iPad/Kindle thing you’re worrying about. But actually, that’s why I’m writing. See, I think it’s time for Amazon to swallow us up, and I think it will give you a big leg-up on Apple, and Facebook and all that crowd. But let me explain that in a minute.
The Time is Now
First, just wanted you to know that we’ve been laying a lot of groundwork for you to take the keys to the place. And even though there’s more work to do, this might be just the ticket for both you and for us.
We’re just about to do that whole social media thing I mentioned in our last shareholder report. We’re going to go viral and all that. Run some ads. Grow the user numbers. But before we do, you can probably convince Philip and the board to sell us for a decent price. Get us now before our numbers start going up and our valuation grows.
But you should know a little secret about that, and it speaks to why Amazon is the perfect purchaser of Linden Lab: we can’t seem to ‘scale’ this thing. Our concurrency has been flat, and there’s speculation that it’s because people log off as the lag grows – but the reasons don’t matter. The solution does, and you know what it is: the cloud.
So why don’t we chat – without Amazon and your cloud thingy, this whole social media/advertising thing we have in the wings might not work. And the asking price is lower anyways while we have relatively flat growth but a decent run rate on our virtual economy.
But imagine how awesome it would be if we could just scrap our whole infrastructure and run the entire operation from your cloud engineering group. Kills a whole bunch of overhead, takes away the worry about scaling, and I figure you guys could do a better job of it anyways if for no other reason than there’s more of you.
What We’ve Been Up To
So, if you haven’t had a look at Second Life recently now’s the time. I think you’ll be impressed with how Amazon-friendly we’ve made everything.
We’re about to launch this new Marketplace thing which is really one giant tribute to Amazon. I mean, have a look, and tell me if this isn’t reminiscent of what you guys do:
We have wish lists, store fronts, even the equivalent of one-click shopping! And what’s better, none of the warehouse costs of physical goods.
In fact, we’ve done a lot to make Second Life commerce friendly. From the moment you sign up it’s commerce all the way. We want to get our users engaged in the whole experience of shopping in a rich, 3D environment. In fact, one of the Second Life ‘journalists’ calls it like being in an Apple store selling Microsoft products! Take that Steves!
But my point is that we’ve been working hard to think about what the Amazon of the future looks like and we figure it looks a lot like Second Life. We have merchants selling individual objects, stores, wish lists, one-click shopping….and we’ve been looking at a whole user rating system, not unlike what you guys have. We send out e-mails to our users encouraging them to, well, to buy mostly. They’re plunking down money for virtual homes and virtual shoes. It’s awesome!
Oh, and don’t worry about the whole DRM thing. We have that covered. We’ve been working really hard to plug the content theft stuff you heard about a year or so ago. We’re not all the way there yet and probably never will be – I mean, you know as well as I do that you can never FULLY secure digital content, which is why it’s so nice to know that you understand it’s an issue of technology plus enforcement.
Remember the time you recalled a bunch of books from user’s Kindles and faced a big firestorm about it? Well, that doesn’t happen in Second Life. We just delete it from their inventories and no one’s the wiser, and if they are, our DRM reporting system is totally hidden and users never know why something was deleted or who reported it. Genius no?
The 3D Value Chain
But the shift to a commerce-friendly virtual world is just one of the reasons you should buy Linden Lab. That’s just the window dressing really. It must really irk you, for example, that Facebook is getting all that press coverage for the virtual goods being sold through Farmville and stuff like that. I mean, we sell more virtual goods in Second Life than those guys, so why do they get the big market valuation and Amazon is left looking from the sidelines?
Virtual goods are growing, and they’ll continue to grow. And not just because they’re virtual, but because they’ll increasingly represent real world goods too.
Imagine being able to offer some of your current merchants a 3D store to go with their 2D storefront? With the introduction of mesh in the wings, and the growing ability to do 3D scans of real world objects, this is an ideal opportunity for Amazon.
You’ll be able to offer your merchants an Amazon scanning service which takes their stereos and furniture, their clothes or toasters, and turns them into 3D objects. I mean, with your reach and size, it would be a cinch to get up and running.
Every Amazon merchant can now have a 3D version of their stuff for sale that potential buyers can view using HTML-5 or whatever. But even better, they can buy virtual versions to test out in their 3D homes.
See, in the future, Amazon can be at the forefront of “mixed reality”. Imagine if you’re able to take a slice of every piece of the “object economy”:
- Set up a 3D design, prototyping and manufacturing value chain. Let consumers design their own tables and chairs and then send it to the Amazon plants where the designs are constructed using 3D printers and computerized to-order manufacturing!
- Then, allow those ‘designers’ to list their objects on Amazon. Take the 3D model and embed it in your Web site so other users can rotate and zoom.
- Give them virtual show rooms in Second Life (Amazon Life?) – the mall of the future!
- Let them buy both the physical object and a virtual version.
Pretty nifty huh?
I mean, you get a pretty big slice of the virtual goods market just by buying us, but then you have the infrastructure to convert that into a connection to physical world goods as well: it’s an end-to-end service to your current merchants, access to a community of people willing to buy pixels to dress up their avatars, and instant 3D show rooms.
Communities of Interest
But you know as well as I do that the era of the big online shopping mall is under siege.
The thing these days is social, and digital.
It’s all about e-Books and e-Movies and e-Everything. You’re under attack by Netflix and people are renting movies through their XBox. Your biggest market of all, books, is under attack by Apple.
But the way of the future is the provision of social experiences. And Second Life is a social experience. (You can check it out, just Google “Tom Hale”).
Here’s what I figure – by having your very own ‘Amazon Life’, you can create communities around content. Because end of the day, content is still king. And while Second Life has tons of content, it’s not the kind that translates into the kind of “making bank” that we’re all looking for.
But imagine this – you buy a book on Amazon and you’re instantly invited to a book club being held in Second Life. Or even better, the publisher sponsors a reading by an author in the virtual world and recreates, I dunno, the ancient city of Paris or something.
Same thing with movies, music, whatever you want.
The key here is small communities of interest, which is what the Net has turned us into anyways right? Small, loyal groups of viewers or readers and you’re giving them an out-of-the-box community that overcomes the barriers of geography.
Imagine what it would do for your place in the market: “Amazon goes social by giving 10s of thousands of small ‘communities’ a home of their own’.
You Have the Vision, We Have the Place
I can’t even imagine what you’ll come up with when Amazon buys Linden Lab. You’ll be able to spin it as the next generation of online shopping, beef up your credibility as being part of the whole social media trend, and get some extra leverage out of the Amazon Cloud (and maybe help us kill lag!)
We’re already working hard to make Second Life both richer (that mesh import thing I mentioned, but we’re also adding Havok 7 and lighting)….so maybe you’ll do a whole new “store” for Machinima, in-world games, or who knows what. But we’re also working hard to make Second Life “lighter” – we’re working on mobile apps, a programmable user interface (imagine the benefit to merchants!), and that connection to social media thing I told you about.
I can just picture what you’ll do with our concept of “Second Life Homes”. Maybe give a free home to anyone who buys $100 or more of Amazon products? And then stream your own shows, send product announcements, test product prototypes through this now-captive audience of virtual world dwellers?
Oh! And maybe you can finally do that Questville thing you were thinking about. What ever happened to that anyways? No worries if you didn’t finish it – we have 70,000 users or so at any time who’d love to earn a few Lindens each to answer questions.
And maybe you can get Second Life voice to work. We’re number two in voice minutes after Skype – imagine the feather in your cap if you could tie Web-based voice into your empire?
In any case, I’ll leave it to you to bring a big vision to where Second Life can go.
Looking forward to your thoughts and response, and please remember time is limited!
M
[...] This post was mentioned on Twitter by Bevan Whitfield, Dusan Writer and Doubledown Tandino, Deirdre : MintPowers. Deirdre : MintPowers said: OMG… RT @BevanWhitfield When Amazon Buys Linden Lab by @DusanWriter http://bit.ly/bh6DUG #secondlife [...]
Oh no, not the Cloud…
Seriously though; cloud computing is not a silver bullet. It’s a cost-effective way of farming out your computing/storage needs, nothing more, nothing less.
Second Life is hitting scaling issues not because of the hardware it runs on, but because of its architecture, and its content. The Lindens have put a lot of effort into removing the need for services that cannot be scaled easily, but AFAIK that’s an ongoing process (the next step of which is to move texture delivery from a UDP based protocol to the TCP based HTTP).
Then there’s content. Very few people realise what all those 512×512 or 1024×1024 textures are doing to graphics cards (hint – they’re huge, and graphic card memory limited). Hair with a resizer script in each of its 100 or so prims plays havok with the thread handling code. That’s just two example off the top of my head, I’m sure there are more.
Personally, I hold out the most hope for moving to smaller inter-operable grids. Individually hosted OpenSim grids may be less reliable by themselves, but can provide a whole that lacks the single points of failure (although I’ll admit, single points of failure for SL at the moment are things such as a data centre losing all power) of SL, while reducing scaling issues by breaking the world down into manageable chunks.
Xugu:
But that assumes that Second Life would always run on a centralized architecture. When the Lab packaged up SL to run behind the firewall (Second Life Enterprise) they already set the groundwork for a decentralized Grid. In my hypothetical scenario, Amazon would shift the individual sims into the cloud and take a stick of dynamite to the current asset server.
Amazon would then sell merchant “boxes” (sims) much like SLE.
The idea that SL always needs to have its current architecture or, even, that the server code always needs to be closed is a presumption.
Dusan –
Wow, great article!
And imagine the virtual world commerce opportunities once we’ve got those nice 3D TVs in every house and gesture-based interfaces.
Here’s a link to the famous Doonesbury strip with Boosie’s VR shopping trip: http://images.ucomics.com/comics/db/1993/db930507.gif
It will be interesting to see whether Amazon will be the first to make a successful transition to 3D, or whether it will be Google, or whether it will be some Facebook app, or whether SL will figure out a way to scale up and go mass-market.. or if it will be some guy or gal, driving cross-country to set up a brand new company as a site on the new 3D Web.
– Maria
* gets in his car and starts driving, then realizes he doesn’t know which way California is *
The tone of this article varied from sarcastic to earnest, so I wasn’t sure if you were joking or proposing something reasonable.
A few nit-picky points:
Second Life already has a “cloud” architecture. In fact, Linden Lab already uses some of Amazon’s cloud offerings (“Amazon Web Services”), such as S3.
Amazon already sells “virtual goods,” including Kindle e-books and MP3 music files.
Maria raised this idea of “the 3D Web.” SL is not the 2D web with an extra dimension added to make it 3D. We may as well call the Empire State Building a 3D photograph. SL is not some kind of inevitable transformation from 2D symbols to 3D symbols.
SL is a simulation of the physical universe that we humans all experience in everyday life. That’s why it’s so familiar. It doesn’t have the exact same things in it, but it has ground and sky, water level, clouds, Newtonian physics, simulated people walking, talking, and running, objects that collide, and all the other aspects of the physical world that are so familiar we rarely think about them.
SL is less abstract than the web, not more so.
I thought you kept the sarcasm pretty consistent myself..
Perhaps the Google Cloud might be another possibility. At the last Google I/O they announced new options to port complex applications to the cloud:
http://giulioprisco.blogspot.com/2010/05/google-io-2010.html
But I am think one of these days Google will launch its rumored Google Meetings videoconferencing tool (link above) integrated with Google Apps, and it will quickly become the leading application for collaborative business videoconferencing, displacing some similar applications of 3D virtual worlds.
Dusan, what a perfectly delicious croissant you served to go with my morning coffee.
I am still in amazement that “someone” hasn’t taken the next step in virtual shopping for real goods. I’ve been surfing endlessly trying to find a new coffee-maker and a new gas grill.
How cool it would be to go from a site, like Lowe’s or Amazon, with product details to being transformed to a virtual shopping area where I could talk live to others about what they liked or didn’t like about various products, instead of reading endless reviews that I’m not sure are written in earnest.
How cool would it be to shop in a virtual world where I spend so much time already working and socializing and shopping for virtual goods, to incorporate clicking inworld on RL products to purchase them after making my buying decision.
Mainstream… hurry up and catch up with us. We have needs to be met.
The “Google Cloud” as a service others can use (like Amazon Web Services) is still fairly new. Google App Engine has been around for about two years but they only just announced the business version of that (with a Service Level Agreement), and it won’t be available until later this year.
Google also announced a storage-only service (like S3 but architecturally very different) but right now it’s only available to developers in the United States in a limited beta test.
Of course, Google already offers a ton of services on top of their cloud, and many SL residents already take advantage of those (e.g. Google Search, Blogger, AdSense, Gmail, Google Groups, Google Calendar, etc.)
Folks, really, Google tried this before, with Lively, and it was an utter failure. Imagine what is gonna happen when Jack Linden tells Google that no, they can’t run adsense programs on virtual land billboards. Jack will either get fired or Google simply won’t bite to begin with.
Amazon is smart enough to see that SL is hopelessly broken primarily because LL’s management is hobbled by predatory retards who think that anybody else making a profit at something is somehow stealing from their bottom line.
And no, Georgianna, nobody is going to bite at the virtual shopping for real world goods idea, (one which I have been hyping to major corps for years now, to no avail) for several reasons. One of which is the Linden dollar, and another being the bookkeeping nightmare that results from paying for things in a currency that its creators refuse to acknowlege is actually a currency instead of a “licensed service”. Other reasons are that, given the many stories of Linden Lab seizing the money and property of users (myself included, to the tune of many millions of L$), real life companies will always refuse to do business in any jurisdiction that refuses to absolutely guarantee their right to their property, it doesn’t matter whether it is Linden Lab or Venezuela you are talking about. A company that refuses to comply with Marsh vs Alabama is not going to attract other businesses to play in its world.
[...] and timely blog post over the weekend. Dusan Writer discussed a hypothetical scenario where Amazon and Linden Lab (creators of Second Life) join forces to create a virtual marketplace, combining the Web’s strongest e-commerce model with the best [...]
In this ironical/hypothetical scenario, Amazon would be the solution for the flat users number of Second Life… and why is that flat again? “Our concurrency has been flat, and there’s speculation that it’s because people log off as the lag grows – but the reasons don’t matter.”
That’s where I disagree: the reasons do matter. Or even: the perceived reasons matter.
Right now, in the wider space of social media – folks who use social media for professional or personal reasons – the most common reaction I get on Second Life is “I thought that closed down a long time ago.”
Avatar based, open-ended, user-generated immersive 3D environments for grown-ups are a big success… for a loyal niche of believers, and that’s about it.
Metaplace tried and failed, Google tried Lively and failed, Google runs Google Earth but nothing indicates they want to turn that into a virtual world.
Second Life is great for geeky meetings, for proto-typing, for education (how many of the immersed students actually stay after their assignments?), for people who want to live a fully immersed roleplaying second life, but it’s not going mainstream anytime soon – it’s one of those great tech-ideas which just don’t make it (in terms of going mainstream).
So Amazon won’t buy it, because even though they love to cater for the long tail, they are a mainstream company by now.
So, I said it. That’s what I, a proud resident of Second Life, think about it – and I hope I’m wrong about this, that it would be as simple as ‘solve the scalability problem and we go mainstream.’
You’re absolutely right, Roland. Scalability is not the barrier to mainstream adoption, and I made the point facetiously in the post – if the Lab DID reach out to Amazon it would be because they can’t figure out that it’s not the first hour, it’s not the dark fiber or whatever it is, it’s not whether people shop or not which are the road blocks to increased use.
3D environments are about to go mainstream because they’ll be embedded in Web sites, there will be 3D spaces without avatars, MMOs will be streamed like television shows. 3D is the next wave of Web development and it will integrate with augmented reality – mirror worlds, 3D product displays, etc. It will be irritating (think blinky banner ads) but it will also become profound as designers learn how to use 3D tools effectively.
The thing that Second Life always had going for it was content, which was facilitated by tools (tech), commerce and ownership. Content and creation then became the signaling mechanism for deep community.
But Second Life has done everything possible to put road blocks to content and the communities that emerge because of it.
Trying to find something? Break search.
Trying to bring a group together? Group chat and notices don’t work.
Trying to keep in touch with your students? Don’t send IMs, they might cap.
Trying to build something? Release a viewer that’s unusable by most serious content developers.
I still believe there’s a role for large-scale virtual world technology, whether using distributed architecture or centralized systems. I’m not so sure the Lab can dig itself out of the hole it’s increasingly finding itself in but I’m confident in the larger promise, although I tend to think it will come out of a large-scale game environment (think Dead Red Redemption on a global scale but with the ability to rez prims) than the current technology set.
LL’s been saved worrying about concurrency at least for a while, because less and less people have been logging on over time. http://taterunino.net/statcharts/median_conc_by_day400.jpg
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