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Linden Lab

Linden Lab

The Motley Fool online journal recently reported falling prices of virtual land, fewer online transactions in the first and second quarters of 2008 and a fall in the value of the Linden dollar.

Global HQ: San Francisco, US Website: www.lindenlab.com

Global leader: Mark Kingdon, CEO

Core activity: Virtual world platform creator

Key customers: IBM, Cisco, Toyota, Starwood Hotels, Thomson Reuters

Revenue: Not disclosed

Employees: 200

It’s not just the real world that’s suffering a financial crisis, but also the virtual world Linden Lab created, Second Life, a 3-D virtual world with more than 15 million users.

The Motley Fool online journal recently reported falling prices of virtual land, fewer online transactions in the first and second quarters of 2008 and a fall in the value of the Linden dollar.

Earlier this year, virtual banks were banned from operating in Second Life because of the risks to the virtual economy.

However, not all is bad, with subscribers spending 48 per cent more hours in Second Life in August 2008 than a year prior.

Second Life is not the first virtual online world, but has gained prominence for its expanding user base and unique policy that allows participants to own the intellectual property rights to the in-world content they create.

However, like real-life, in 2007 this led to Linden Lab being sued for banning a user who claimed to have lost US$8000 worth of virtual property.

Information Week recently reported Second Life is so popular because it reflects real life, with dance clubs, music stars and even role-playing communities. There’s shopping for virtual clothes; simulated surfing, sailing, travel guides and cybersex.

CEO Mark Kingdon, who joined the company this year, recently told Venturebeat magazine he was making the site more accessible and usable. Previously, the focus was on branding, but now it is on collaboration and learning. Linden Lab claims to be profitable, saying almost US$1 million US dollars change hands in user-to-user transactions everyday. It also sells virtual land and earns from advertising and search revenue. Other virtual world platforms are appearing, including Lively from Google, but Kingdon claims Second Life is more dominant and all encompassing.

As he states in the VentureBeat interview, people are making money from buying and selling virtual items and over time Second Life will be even more diverse. As real travel becomes more expensive people will travel more virtually, and a recession should not affect Second Life. Darren Greenwood

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