Interview with Linden Lab CEO Mark Kingdon

Kingdon: Well, the first thing is we've been doing search engine optimization like all good companies do to make sure that our website does well in rankings. We're doing basic blocking and tackling. Then, the next thing that we've done is we've very substantially shortened the registration flow. Initially when I started the registration process was seven pages long -- as long as a mortgage application! And, we shortened it in July to one page and saw a very substantial increase in registration completions. And then we've also implemented better email management techniques to increase activations. So, with that first registration email that says 'Welcome to Second Life', we make sure that gets through spam filters, that it's got a copy in it that you recognize, and that helps you come to Second Life.

We also changed from having orientation islands, which were pretty extensive experiences, to "help islands" which are not as feature-rich as orientation islands, but seem to generate the same degree of following activity.

And, so, those are the first steps, as I said, we've taken. I feel like, the first of probably a hundred steps to optimize that chain, as well as launching a new home page which actually also has performed very well. So, we've identified a whole series – this is just good marketing -- of drop off points, holes in the bucket. if you will; that we're working to fill.

Industry Standard: Now, when you say that you're using SEO, usually, for an online publisher, they use SEO to get new customers in who otherwise might not know about our content because they have never visited our site before. For a site like Second Life, there's a very limited universe of virtual worlds.

Kingdon: There is. You just want to make sure that the content that you want to surface surfaces well. You want to make sure that essential content is appropriately drafted and packed so that it can be picked up by the search engines.

Industry Standard: What kind of content are you talking about?

Kingdon: You know, keywords that people use when they're interested in virtual worlds. "Avatar" is one of them.

Industry Standard: You also mentioned that you shortened the registration form from seven pages to one. Does this mean that you made one page seven times as long, or did you actually cut out a lot of questions?

Kingdon: We cut out a lot of stuff. I have to go back to do a before and after comparison, but basically, we got rid of a lot of stuff that we were asking. I mean, it was nonessential stuff. It was nice to have from a marketing insight perspective. But we haven't given up any essential information, and we probably added back a field or two. So, that's a work in progress, and it's going to change yet again, as we see. That was just the first step, and now we have another set of changes around sequencing and intensity of the forms.

Industry Standard: You mentioned two metrics. You mentioned downtime, and you also mentioned the number of active monthly users. What about the [Second Life] economy?

Kingdon: Well, I watch that very carefully. I watch it like a hawk. In terms of the in world economy, we look at the level of user to user transactions in terms of volume. So, how many transactions. We look at average transaction size, and then we also look at the Lindex to see the degree to which people are buying and selling virtual currency. And, we look at land stats. And those are metered just like the other metrics that I measured.

Now, the in world economy is, my hypothesis is because it's a large enough and diverse enough market that it comfortably finds its equilibrium. It's not particularly volatile. In other words, the in world economy, when you look at transaction volume and transaction size, doesn't move around as much as things like Web traffic and registrations. So, we watch it like a hawk, but it continues to grow at a comfortable and steady clip.

Industry Standard: When you say it's not as volatile, shouldn't it be tied into real-world trends? For instance, Christmas holiday, everyone's off for a week, they have more time to spend. Maybe they're feeling good because...

Kingdon: Well, Christmas Day actually is a slow day for us. Christmas Day and New Years Day are slow days for us because people are usually doing other things needed. It's a very different concurrency period. It's actually quite a lot. As a matter of fact, I logged in on Christmas Eve and Christmas Day and looked at our concurrency chart, which is always live. And I went in to Higher C, which is our internal chat to ask the team that watches the grid, I'm like, 'It looks slow. Is this...?' And then, of course, everybody pointed back, 'Well, look at last year.'

You know, Christmas Day is pretty slow. People are eating turkey and unwrapping presents. They're not in Second Life.

But, they'll be here later. Wait until after Christmas. Then it's true, we just had another concurrency high this weekend.

Industry Standard: In the real world, the month before Christmas is a huge retail shopping time. Is that also a transfer? Are all the creative types producing more virtual goods? Or, trying to sell stuff?

Kingdon: We did see, yeah, we saw some [but] it's not the same. The interesting thing is that there's no Black Friday in Second Life. We do see more transaction activity in the holiday season, but it's probably not as marked as it is in the real world, which is good, because it means that our merchants are not relying on Black Friday the way retailers are. Black Friday can make or break your year if you're a real-world retailer. It's not the same in Second Life.

That being said, we see a lot of opportunities to give our in-world merchants more marketing tools to market their merchandise, their businesses, so that they can make more of holiday purchases.

Industry Standard: Is Linden Life profitable?

Kingdon: Yes.

Industry Standard: As a level of profitability, has that kept pace with the increase of the number of staff that you have? [Ginsu Yoon] mentioned that you have increased your staff.