Eric Krangel

A graduate of U Penn and Columbia Journalism, Eric comes to SAI from Reuters, and has written for numerous publications including the Chicago Tribune, the New York Sun, the Bond Buyer, and the Montreal Gazette.

Disclosure: Eric has positions in Google, Yahoo, Apple, Marvel, and several low-cost index funds.

Second Life's Second Act: Business Teleconferencing?

Another high-profile exit from Linden Lab, the company behind Second Life: VP for Biz Dev Gene Yoon (a/k/a the avatar "Ginsu Linden") is leaving the company.
Gene's departure follows the exit of John Zdanowski, Second Life's CFO, less than two weeks ago.
There's been a lot of turnover at Linden. The core executive team that gave birth to Second Life, witnessed its meteoric rise, and endured some of the backlash are now mostly gone.

In February VP of Marketing / high-profile spokeswoman Robin Harper left for points unknown
Second Life founder Philip Rosedale stepped down from the CEO spot last year to take a more advisory role as Chairman
CTO Cory Ondrejka, the engineer who programmed most of Second Life, left for EMI Music after a dispute with Rosedale

The service is completely in new-ish CEO Mark Kingdon's hands now.
Where Mark goes from here is something of an open question. Linden's old business model relied on creating and selling ever-increasing amounts of "virtual land," which Linden Lab collects something akin to a property tax on. But at the same time Linden relied on virtual land for most of its revenue, the company also encouraged the development of OpenSim, an open source clone of Second Life which lets people freely host "land" on their own PCs without any money going to Linden.
So what's next for Linden Lab and Second Life? Well, the company has been talking up Second Life as a business teleconferencing app, and the recent decision to finally confine Second Life sex to a virtual red light district represents an radical shift in the type of service they offer. Hopefully the change in stance will make Second Life more palatable to business (read: fees-paying) customers.
Presumably, getting businesses to bite will be the job of Gene's successor. Linden says revenue has grown for the last four years (a major feat in this environment), and the company is profitable. That said, management does seem to have jeopardized part of its revenue model by emphasizing a commitment to "open-source."
The leaders of the OpenSim / open source community Linden once embraced have their own agenda, and they're getting closer to offering something as good as Second Life for the hobbyists. Five years from now, the Second Life idea will undoubtedly still be here, playing out on thousands of distributed OpenSim servers. But it's not clear that Linden will capture the benefits of that.

Better Business Bureau Gives Second Life An "F"

During my brief stint as a Second Life business reporter -- there to track the growth of the virtual economy in the 2007 heyday -- a lot of my stories centered on the fact that Second Life actually didn't seem to be a very good place to do business at all. IP theft is rampant, bugs are severe, and fraud is both widespread and unpunished.
Now the Better Business Bureau chips in, and gives Linden Lab, the company behind Second Life, an "F".
The BBB cites:

Number of complaints filed against business.
Failure to respond to complaints filed against business.
Length of time business has taken to resolve complaint(s).

Not too surprising: Linden encourages people to create virtual goods-based businesses with real money, then makes decisions on land, currency, advertising, outlawed content, or a million other things that directly impact people's livelihoods.
We feel some sympathy for Linden here -- Having worked closely with Linden employees, most genuinely try to help and mean well. But the intricacies of governing a real-currency microeconomy are so maddeningly complex it's impossible to give people anything but superficial customer service.
There's also the griefer angle -- Given the penchant for drama that runs deep in Second Life, it's not unreasonable to assume at least some avatars are filing baseless BBB claims for sport. (I was referred to this story by the @Tizzers twitter account, a guy so deep on Linden's sh*tlist the company at one point banned every avatar with the first name of "Tizzers" from Second Life.)
But no matter how you cut it, real money invested in Second Life is subject without limits to the whims and mercies of Linden's overworked staff. And as the BBB notes, Linden tends to ignore complaints.
Second Life was, and is, a marvelous place for exploring, meeting new people, and letting dormant aspects of one's personality find expression. And thousands of people do run profitable micro-businesses there. But for anyone looking to make a virtual fortune, we suggest they heed the BBB's warning, and don't quit your day job.