There’s a pretty simple rule for investing: buy low and sell high. Now, there’s another set of rules, and they’re a lot more complicated: how much something is worth will depend on who you ask.
In Silicon Valley, for example, something can be worth a lot even though you can’t seem to find any money changing hands. In the rest of the world, there are formulas for valuation, they’re often well known (a services company in Industry X might be worth 1.5 times earnings, for example), and they’re often adjusted based on intangibles like “synergy” and “goodwill” but you’ll usually still float around a predictable price point.
With recent changes and announcements at Linden Lab, speculation is running high that a sell-off is imminent. Tateru has read the tea leaves (and spoken to ‘a lot of people’ with ‘wide variety of business backgrounds’) and has come to the conclusion that its bikini season:
Swimsuit weather is fast approaching, and the old girl wants very much to lose about an inch off her hips so she can get into that bikini and have someone pick her up.
I do not find myself in any doubt now that Linden Lab has been positioning itself for a sale. Either that, or the Lab has some serious problems that it has not divulged. A suitor is not looking for something with too much weight on its hips, or much in the way of special needs. Prospective suitors are either looking for a trophy wife… or for a source of valuable organs.
A Lab, Irrelevant
Now, maybe I like to buck convention. Maybe I have inner angst and turmoil over a change at the Lab: I mean, who would I write about, be astounded by, and shake my head at? I mean, I do business in Second Life, but it’s just another tool in our tool kit.
I don’t deny that people can be deeply impacted by the changes at the Lab. I don’t deny that they make monumental mistakes, they don’t always finish what they say they will, they break things that weren’t broken and all the rest of it. But for me, at least, I’ve come to realize that when I look back the actual impact of their decisions (on my life at least) has been, well, negligible.
I can even think back to the days I was making and selling houses. It was exhilarating, fun, I made some money – but it was also maddening and frustrating. The Lab would change something and I’d need to check my parcel listings, or re-script the doors or whatever. But taking a slightly broader view, it wasn’t really that much different than needing to tweak a Web site to take advantage of HTML-5, or keeping an eye on Google to make sure that the keywords were still returning a high enough search result.
Technology changes, you roll with it (or you don’t), and you’re often at the whim of things outside your control – Apple either supports Flash or it doesn’t, Google either changes its search algorithm or it doesn’t, and you need to know what the latest social media gadget is so that you’re still talking in the places that your audience will listen.
So I say all this to make the point that for the most part the Lab might be idiotic, they might be tone deaf when it comes to messaging or how they implement change, but generally a few months passes and you can’t entirely remember what the drama was all about. Remembering all of this, I don’t have a particular stake in what the Lab does, and my preference would be that they sit in the background as much as possible, they do a better job providing the basics (like customer support and fixing bugs) but that they otherwise just sort of leave us alone.
A Lab for Sale?
That’s my way of saying that I don’t really think I’m doing some kind of magical thinking about where the Lab is at.
I mean, maybe I am and am so delusional I don’t realize it, but my belief is that the Lab is NOT for sale (at least not yet) and that this is a logical conclusion.
All they’re doing with all this trimming and changing, adjusting and plodding, is what they said they’d do: focus on a broad consumer market (believing that by doing so “sub-segments” would also benefit); make things fast, easy and fun; and take a new approach to how things are developed and executed.
But against the backdrop of value, I’ll return to the simple rules noted above:
Buy Low, Sell High
Linden Lab and Second Life aren’t worth as much now as they were a year ago, or 5 years ago. You don’t sell when you’re down unless you have a liquidity crisis, or you see one on the horizon.
And as much as there’s a lot of speculation that the cut-backs in staff, offices and other overhead must mean that there’s a liquidity or profitability crisis, I’m failing to follow the logic.
If your stated strategy is fast, easy and fun, if you’re going after a broad (mostly consumer) market and no longer worrying about individual constituencies (like Europe, say, or educators) then how does trimming offices and staff that don’t assist with that mandate indicate anything other than being “on strategy”?
Now, neither you nor I can see the Lab’s balance sheet. Maybe I’m wrong – maybe they leveraged all of their hard assets (how many millions of dollars in servers and other capital equipment do you think they have?), maybe sim sales and revenues have plunged drastically (can anyone point me to a statistic showing a significant decrease in revenue from server rentals?), or maybe the money they make from other sources has evaporated (can anyone show me a significant decline in a relevant statistic related to the money the Lab makes?)
So while I don’t discount it as a possibility that the Lab is losing money or is headed for a crash, I actually haven’t seen anything which indicates this is true, other than speculation that cut-backs are a de facto indication that the company is failing.
I mean – maybe they’re simply doing what they said they’d do?
I strongly lean towards discounting the theory that the Lab is losing money. But I also strongly lean towards the theory that they are worth less than they were a year ago, 4 years ago, whenever. Concurrency is flat, sales growth is negligible, and the new revenue streams from the Marketplace (the Lab, for example, will be taking a cut of purchases made using dollars rather than Lindens) and mesh imports haven’t kicked in yet.
So for the Lab to be selling now, it would be selling low. And as noted above, that’s not what investors typically try to do.
Valuation
The other factor in selling a company is valuation. For a lot of companies, valuation is primarily based on trailing revenues, hard assets, and intangibles like ‘goodwill’ or ‘brand value’. In many industries, and the tech world in particular, projections play a role that’s just as important as history. And in Silicon Valley, projections are often divorced from actual money: you’re more interested in how many users (or click-throughs or user hours or whatever) a platform has than you are in how much actual cash it makes.
Based on this, Linden Lab has a suboptimal sell price because, well, it isn’t growing.
This limits its options for a sale to those companies that have existing audiences, or as part of a technology sell-off where it’s not the audience at all which is important, it’s the code.
Frankly, I don’t think the code itself has much going for it. Maybe it did 7 years ago or whenever, but I don’t think the technology assets on their own are worth a whole lot.
Linden Lab, in other words, needs growth of some kind in order to raise its market value (assuming that they are still aiming to ’sell high’ because they aren’t faced with a liquidity crisis – an assumption I’m going with).
Due Dilligence
Now, Tateru brings up an interesting point: there have been a lot of moves at the Lab which look a lot like ‘clean-up’ ahead of a sale. Making sure that licenses are up-to-date, the Terms of Service still make sense and the rest of it. As Tateru says:
That means lean to the point of anorexia. To the point where the business becomes almost unable to function. Staff reductions, team elimination, making sure all your obscure licenses are not in breach, not even slightly. It means reducing paperwork, overhead and special deals, rechecking your intellectual property inventory, update the terms of service and so on.
It means becoming as simple as possible. Every single complication or special case that requires documentation beyond GAAP, or a meeting is going to knock a million dollars or more off the company sale price. That would also include all manner of contractors, messy overseas assets and payrolls, and special people like newly-hired CEOs. The current interim CEO doesn’t really represent that level of complication.
And I find this a very plausible interpretation although I actually tend to think that these changes are related to two things: being “on strategy” (as I note above); and the invisible hand of Bob Komin, who is rarely mentioned but is the Chief Operating Officer (working side-by-side with Philip) at Linden Lab.
Bob’s position, as noted on the Lab’s Web site, covers:
Bob Komin is the Chief Financial Officer and Chief Operating Officer at Linden Lab. In this role, Komin will be responsible for all financial matters and controls, human resources, legal and administrative functions globally. Komin will also oversee the Second Life economy, the largest user-generated virtual goods economy in the world. Prior to joining Linden Lab, Komin was the CFO for early stage solar energy start-up firm Solexel for the past two years. Before that, he was the CFO for privately-held Tellme Networks, a voice technology that is used by more than 40 million people each month. In his seven years at Tellme, Komin helped to build the business from pre-revenue stage to over $100 million in revenue and grow its employees from 160 to 300. He was also a leader of the acquisition and integration of Tellme by Microsoft in a transaction valued at approximately $800 million. After 5 years in senior financial roles at Cincinnati Bell, Komin was the VP, Finance & Treasurer of the founding executive team of Convergys, a NYSE traded company that was formed by a spin-off and executed its $225 million IPO in 1998. Komin was responsible for raising over $2 billion in equity and debt offerings while VP, Finance & Treasurer at both of these public companies.
Komin received an MBA from Harvard Business School and a B.S. in Accounting and General Science with a minor in Chemistry from the University of Oregon.
So, we have someone who has been in the position for a few months in the top position (next to Philip), and whose responsibilities include financial matters and controls, and legal functions, who has an MBA and a B.S. in Accounting, (and who has contacts at Microsoft) and we wonder why the Lab is doing what could easily appear to be nothing more than operational housekeeping?
It feels to me like Komin may be the “invisible hand” behind a lot of the recent changes at the Lab, while Philip continues to drive his strategy of ‘fast, easy and fun’.
But What About Microsoft?
Against the speculations about a sell-off was recent news that Microsoft had at least ’sniffed around’ at the Lab.
And I’m going to leave a full analysis of that to later, but I will propose one other thing: that while tech companies are often approached by other companies, the Lab may not be looking for a buyer, they may be looking for a “Stage 2″ (or is it 3?) investor.
Bring in Microsoft, or Blizzard, or Amazon or whoever – tell them your plans, and offer to sell them a stake so that they’re in on the ground floor of the next wave – and that if things go really, really well, they can gobble up the whole thing later, once the platform is back on a growth curve.
The Investor Pitch
So where does that leave us?
My personal guess is that:
- The Lab is not facing a profitability or liquidity crisis
- Structural changes have been part of the stated strategy of focusing on a broad market and making things fast, easy and fun
- Non-structural changes (licenses, TOS, etc) are being driven by the ‘invisible hand’ of Bob Komin
- And the Lab intends to drive a high valuation by doing what it said it would do: making Second Life faster and easier to access and more fun to use.
And here’s my guess at the pitch. The imaginary dinner Philip had with the investors. And it goes something like this:
Second Life is flat. Concurrency is flat. And we can’t rely on schools or enterprise to drive the sort of massive growth that will lead to the kind of valuation we all dreamed of, where the virtual world isn’t being used by 10 million users but 100 million….or a billion.
Give me 12 months because we can turn this around. And the strategy is really simple and it goes like this:
- There are two things that will drive the valuation of Second Life. First, it’s a social media platform. It connects people. Key to this is that when it connects people, it does so at a level of engagement that can’t be matched.
- Second, it has the largest virtual goods market in the world. Virtual goods are the future and we see it with Zynga and we see it in the fact that the market has grown to exceed a billion dollars.
- As a social media platform with a large virtual goods market, we’re sitting on gold. The problem is, we need more users. And in order to get more users, we need to get more people in and we need to make that fast and easy to do.Our strategy for growing this social media/virtual goods platform includes three interlinking parts:
- Raising the bar on content by providing new tools, like mesh import, expressive avatars and new controllers (think the Wii or Move) and then using the availability of these tools to create significant strategic partnerships around content development
- Drive the virtual goods marketplace by using the newly designed Marketplace as the launch point for new in-world shopping experiences (Marketplace in the Viewer) and the ability to port the Marketplace to other platforms like Facebook
- Make access to Second Life easier by launching a new “no-download” product that utilizes server-side rendering. With no download and access to Second Life as easy as launching a Web site, we’ll be removing one of the major barriers to new users.Tactically, this will mean significant changes. Among these changes:
- Second Life doesn’t need significant technical development. We need to fix the Viewer, because it’s the ‘portal’ through which both users who download the client and those who access SL through a browser will “see” the world, and it’s the platform from which we can launch social media integration and a full “side-tab” Marketplace experience. So, we’ll be able to trim technical development costs to focus primarily on bug fixes, stability, the Viewer 2.0 and new products. But we’ll be able to trim this to the bone because our main focus will be driving new users
- Our customer support, community support, and vertical outreach needs to be scalable. If we’re targeting 100 million users, we can’t afford the types of hands-on support we’ve been giving to education, geographic markets or sub-communities. We’ll close off all efforts that are high-touch and with Bob Komin at my side, we’ll focus on scalability (which means scalable out-sourcing of customer service, automated systems, consistent pricing across segments, etc).
- With the money saved from the above, we’ll be able to invest significantly in new marketing and advertising. I’m pleased that we’ve been joined by Kim Salzer as new VP of Marketing – if anyone knows how to do marketing to ’scale’ it’s Kim, whose background at Blizzard on titles like Call of Duty are nothing if not mass products.Sure, we’ll hear moaning and complaining. It will seem, at first, that we’re cutting our nose to spite our face. But those sorts of problems will take care of themselves as we move from a world of 10 million to a world of 100 million – and return to the days when Second Life was the Next Big Thing.
My best estimate is that the Lab is still 4-6 months away from being prepared for a sale. There’s still a number of things that would have to be done.
My take is that the last thing the Lab wants right now is another investor. I could be dead wrong on that, of course, but that’s the impression I’ve gotten. I just don’t see the Lab wanting to dilute the pool any further.
The person to watch is Ken Sawyer of Saints.
The moment he sees a better opportunity for his money, the pressure will be on to chainsaw the daylights out of the place and get a buck out of it all.
-ls/cm
[...] This post was mentioned on Twitter by Mal Burns, Dusan Writer, Doubledown Tandino, Georgianna Blackburn, cristianmazz and others. cristianmazz said: RT @DusanwriterDusan Why Linden Lab is Not for Sale (Yet) http://ow.ly/2PXgf #sl #virtualworlds #metaverse [...]
Isn’t the ‘fast, easy, fun’ strategy exactly the kind of thing you’d implement to try and raise the company’s value ahead of putting it on sale? Seems to me, Dusan, that your conclusions (insightful and optimistic as they are) are entirely compatible with Tateru’s and isn’t the most conspicuous question right now WHEN Uncle Pip will stick the price-tag on it, not whether he will?
Absolutely – I agree with Tateru that the Lab is prepping for sale, but I believe the “when” is still at least 9-12 months off and will be contingent on how rapidly they can increase the user base, and not contingent on factors like ’stripping down’ (the bikini analogy).
Tateru – I agree on the outside investor. The only reason for it, however, would be if they could find a partner that could help enable their vision of rapid audience increase. In other words, the investor would bring more to the table than just money, they’d also bring something like an audience, a platform, etc.
In this light, Microsoft makes sense – take an investment position but do so with the realization that Microsoft itself can do something to increase the valuation of the company through something like access to an audience or cross-synergy with their gaming products.
So, you look at SL and you say: “They don’t just need money, they need something I have. If I take a position and give them access to my audience, my audience benefits but I also benefit because my investment in SL either increase in value or gives me right-of-first-refusal to buy the whole thing.”
Interesting. Gives me something to think about.
OK, I know it was an imaginary pitch:
….as we move from a world of 10 million to a world of 100 million…
In July, when SL hit 20 million total signups, I noted that only about 7% of those had logged in the previous 60 days, and inferred that Linden Lab have lost 93% of everyone who ever opened an account.
Having just now checked Tyche Shepherd’s Grid Survey and Tateru’s statistical charts, I see a continuing decline in the number of regions, the number of previous-60-day logins, and the median concurrency.
Yesterday, in response to a comment that Philip doesn’t read Tweets, he (or someone with access to his Twitter login) said: “Oh yes I do! Plus, SL is growing, not failing.”
In whose dreams, Philip?
I am sorry Dusan, but Tateru is more convincing. I still believe in SL, but I am afrait the investors are getting impatient. Everything that is going on right now, from layoffs, to TOS changes, Mesh, Marketplace, sim pricing or Snowstorm is either pointing to a sale (cleaning up the company, making in slim and easy to take over) or is something they have developed before the recent turbulences. The only thing that can change my mind is the annoucement of a new project. Let´s say a blog post about a cloud version that they start working on now and that is going to be launched in x month.
Regarding the increase of the user base. There never has been a shortage of new users. Just have a look at some freebie places. There are newbies all over. The problem is the large percentage that joins SL, but never comes back. To fix that problem, SL needs to be more mass market and I believe it is games that need to play a bigger role in SL. To enable content developers to build cool stuff, SL needs to become much faster and less laggy or to say it short: Step 1 Make SL faster (better servers, more efficient code, cloud version), Step 2 Content developers will build cool stuff, Step 3 New residents.
Anyone with an ounce of business acumen is able to see the trimming and cutbacks are indicative of external interest.
The books are being looked at. We just don’t know why… but we know how businesses primp and look pretty when opportunity knocks.
Could be a chance for positive change with insightful new leadership… or it could be an epic fail.
We are digital migrants. I love Second Life but if not this grid… than another. The connection is not to the grid… it’s relationships between people which will persist no matter where the interface occurs.
Skylar
I find the idea of stage n+1 investor compelling, particularly to the end of an eventual IPO when market conditions make it realistic (hah! imagine being able to buy shares with Linden Dollars!) I’d think that a company like Microsoft would be a much less attractive partner to that end than a social media player (Facebook?) or leader web vendor(Google or maybe Amazon) could be.
IMHO, The real value in SL today isn’t the technology itself, but the vast catalog of _licensed through SL_ user created content, the users who keep creating more, and the economy that just keeps churning away. Any buyout would presumably have to leave LL and SL more or less identifiably intact or risk losing access to licensed content.
Really interesting post Dusan and something you said made me start thinking. I will preface a bit, many of my friends play video games regularly and most do so online. They play against people from around the world and often use voice. But there is no real social environment for this. I also read a while back that the video game market has surpassed Hollywood in revenue. I remember reading that in one month World of Warcraft made more than the entire run of the first Iron Man movie. So when you mentioned Microsoft as a partner who could bring in existing users to SL as a product, then it made me think of XBOX live. This might be fantasy daydreaming but imagine taking online gaming to the next level where you don’t just go online when you want to play, but rather live in a social environment like SL and combine that with the opportunity to play while there. Combine the social aspects that SL has mastered with the massive appeal of online gaming. I could almost envision my groups of friends horsing around in the virtual environment for hours before deciding to play XBOX games or whatever. I don’t know if I am explaining myself very well, but rather than separating being online only when you want to play a game, to being online regularly in a virtual world built to accomodate the successful elements that already exist in sl, (relationships, user creativity etc) with the mass appeal of social online gaming that currently has no real social atmosphere to hang out in. Anyway just a thought.
As far as sale issue it looks to me as if it has already happened. On Wall Street, companies bulk up, hire new people and look good for a bigger fish. Once the sale is over, everything is cut up, sold off and what is left is integrated.
I don’t know if Silicon Valley follows the same strategy. But it looks to me as if someone is already on the hook for LL. The cut offs being the instructions from the buyers.
The thought of it being Blizzard/Activision makes me giggle.
To be clear – I can read the ‘tea leaves’ the same way as a lot of you, and see a company that has done stuff and gone eerily silent because a sale is already done, a sale is about to happen, or the company is about to fold.
I’m not entirely naive to all those possibilities, I suppose if nothing else I’m proposing there are other interpretive frameworks….and the reality is that ALL of them might be true.
There may BE a masterplan which is still plodding along and has server-side rendering in its sights while at the SAME time cash is running out while at the SAME time yet again there are buyers sniffing around and looking at the books.
Business is all about having multiple options and contingencies and it may well be that all these things are happening, um, concurrently.
There’s a such thing as ‘tapping out’. As lowly valued as Linden Lab might be right now, it can still stand to be valued even lower next year around this time. So its perfectly plausible that the Lab might be seeking to maximize what their valuation is right now for the pursuit of being acquired.
I don’t think Linden Lab ever raised any totals of funding exceeding 100 million, did it? It’ll sell for several hundred million even now, and it seems like investors would get a good return. Maybe not what they would’ve gotten last year, but it could be less next year is the point.
Second Life has had a dismal churn of new registrations becoming long time users, and a stalling concurrent userbase that it just hasn’t been able to get pass. It’s rather obvious that in terms of product life cycle, Second Life is pass its maturity stage and isn’t growing. When a company has to cut employees to increase profits, the product is what it is.
As far as ‘fast, easy, fun’ being a strategy…it isn’t. There’s nothing of substance that can be extracted from that. What’s more readily apparent is the steps the lab has taken to do the exact opposite; like cut any further improvements to the Mono implementation and cutting resources from viewer development. It’s not like they’re JUST thinning in superficial places like marketing, they’re gutting core talent all in the effort of reducing headcount.
We’ll see though. But all signs point to the Lab seeking acquisition if you ask me.
@melponeme
Employees being slashed after acquisition is usually to reduce redundancy. When preceding acquisition its all about increasing profitability on paper by reducing expenses.
Second Life right now is a mature product that just isn’t demonstrating anymore growth. There’s no trend lines to project higher earnings, so cutting employees and closing offices was one way to do it.
All conjecture though.
Ezra,I was a in a company that followed that game plan. And I was one of the redundant people cut after the game was over.
I saw many other companies follow the same path. LL did it as well. Whether or not they hooked a buyer is up for speculation.
“My personal guess is that:
“- The Lab is not facing a profitability or liquidity crisis”
They specifically said that they downsized partly for money reasons. That doesn’t mean they have a problem now, but it did then.
“- Structural changes have been part of the stated strategy of focusing on a broad market and making things fast, easy and fun”
You have cause and effect backwards. Fast, easy, fun came a month after Philip returned. LL was already 100 people down by then.
“- Non-structural changes (licenses, TOS, etc) are being driven by the ‘invisible hand’ of Bob Komin”
His latest tweet:
http://twitter.com/bk_linden/status/26675233114
“LL’s goal is to create a great business for the long run by delivering a wonderful service that people love. Then we’ll see what happens.”
That’s literally the most generic goal possible. Literally, if you are selling ANYTHING, your goal is to great a business that has a wonderful product/service that people love.
“- And the Lab intends to drive a high valuation by doing what it said it would do: making Second Life faster and easier to access and more fun to use.”
But for whom, Dusan? No audience is stated. It’s about context – what market are they aiming at? “Fun to use” doesn’t necessarily mean entertainment, it just means that when you use it, you enjoy it. But what’s missing is WHAT LINDEN LAB ACTUALLY WANTS SECOND LIFE TO DO GOOD. In other words, a description of what they actually want as a product!
If Linden Lab is not for sale, then they really, really don’t have a business plan.
(will post link to blog-in-progress later)
Ah the continuing prophets of doom have arrived at yet another blog article about the future of Second Life®. Except this time the article makes a lot more sense than the drivelings of wannabees and self aggrandizers, many of whom appear to have relationships with competing ISPs in the VR arena. BTW it is a legal requirement that bloggers declare their paid status. Only one I know of has finally revealed he actually worked for a company that would benefit from the demise of Second Life®.
All I will say is that I agree with BK that Dusan’s article here is probably closer to the truth than many who wish SL to die want.
My advice is simple. If you want SL to die then cancel your accounts and go on over to whoever it is you work for and talk about that place. Leave SL to those with an interest in it’s success.
The less blog, forum, and twitter vitriol I am exposed to the more fun Second Life® gets. Oh, and btw, if you have mainland that is desirable the price you will get if you sell it is still pretty decent. Just FYI. Not all fictional blog, forum, and twitter accounts of the state of the SL economy are accurate. Besides, what are they basing it on? At least Tyche does the due diligence research before posting data. As for the LL published numbers? It is all we are allowed to see. Take it any way you want to.
Have a great SL. Or don’t. Your choice.
Blog: Linden Lab to Educators: Our Foot Is Bleeding. http://j.mp/b3tAHR
At least this blog post is somewhat more realistic than Tateru’s “I think LL wants to sell, now I just have to find the evidence” style of post-hoc rationalization.
I’m having difficulty seeing a company that’s preparing for imminent sale decide to implement faster QA processes that involve putting late-beta code onto their main servers (Kelly’s Crazy Plan), or implementing a massive new tech feature (Mesh), or begin development of completely new ways that a user’s username is registered, logged in, and displayed (Display Names).
In the “LL is trying to become lean in preparation for sale” narrative, none of that would make sense. All of those moves point to a company that is willing to introduce a little temporary instability in the hopes of introducing new features to attract and retain customers. That’s the exact opposite of slimming down and stabilizing in preparation for sale.
Yeah, sure, maybe in a year…but that’s also a bit far off to be making forecasts given the current economic climate. A lot of things (good and bad) could happen in the intervening time.
Not for sale “yet” is a misnomer. When you reach the exit strategy phase of investment, the board of directors doesn’t likely think of the points made here – they just want to know when they will get their ROI. And the only answer they want to hear is “yesterday”. That’s why we’re seeing so many changes coming so fast. If we need proof of this mentality, all we have to do is look at There.com – the investors didn’t have a problem running it into the ground and out of business in their pursuit of ROI. My personal take on it is that Linden Lab is indeed entertaining the exit strategy scenario, and while not accepting lowball bids, such bids are coming in. In the meantime, they are liquidating and cutting costs to make the company leaner and more attractive to such a buyout in the future. So at the very least they are already in the exit strategy phase and making those changes to accommodate the board of directors, even if it means losing most of the universities, NPOs and alienating the community in the process.
@Jahar: It was pretty much the other way around for me. I looked at the things that were going on and asked myself “What do these things mean, taken together?”
And the answer was “This looks just like the acquisitions preps that I’ve been through.”
And yes, we also ramped up on new product/service development, as we were stripping back the complications. It made good marketing bullets, as well as improving valuation, and that was important to us. It was less important for them to be finished before a sale, so long as they were demonstrable in some form.
2 things I haven’t seen anyone bring up. I haven’t seen any stats on how many new islands are purchased straight from the lab. I know people sell islands all the time and they are looking for a lot less than 1200. The lab has run dry on this front, but you would think either way since they are renting out sims at 295 per month and they fit 8 sims now on a server, they still would be making a killing. The mainland must be a problem. Too much mainland, too much unused land I guess. But making 1200 US per server per month for private islands is insane profit.
Why do so many people now talk about Mirosoft, Facebook or Google? They are huge corporations. They are not able to run a company like Linden Lab. Didn´t Google just mess up with Lively and Wave? They just have a lot of money, but have no passion for something like SL. Who knows SL best? -We do. So just a crazy idea. Why not sell the company to the users, employees and strategic partners?
Has it ever occurred in Second Life’s history that a customer or resident of the in-world community, or group etc. has been known to have significantly influenced or changed the course of Linden Lab’s own internal business direction strategy – i.e. due to an innovation or appearance of something unexpected that demonstrated previously unrecognized economic or social potential within the service?
How can it be that Linden Lab finds itself in this current state of reality and predicament? Alternatively, the entire problem holding SL back from solid and sustained growth might have been solved by focusing on the task of fixing the codebase’s inability to handle increased concurrency.
It is limited concurrency at an implemented codebase level, which is the root cause of Second Life’s stagnation and limited ability to host compelling social interactions versus other online services. This problem continues to restrict all other successive flow-on benefits and innovations that might have otherwise added increased value to the company and Second Life as a whole – if only, Linden Lab were able to provide a service capable of managing crowds of avatars in a scene with reasonable performance as its ‘principle’ virtual world experience, and its number one priority.
@Metacam All we’ve got is the number of non-linden-owned simulators, which isn’t *quite* the same thing. http://dwellonit.taterunino.net/sl-statistical-charts-testing/ (Seventh chart down). The figures are current to this week.
[...] Writer has recently speculated that this may be the logic behind the new policy, in an imaginary conversation between Phillip and [...]