While the recession has been brutal on most technology companies, one venture that has done relatively well is Linden Lab, the parent company of Second Life. When we first interviewed CEO Mark Kingdon in January, he said the company was profitable and growing. Last month, Linden Lab released figures showing increased usage of the virtual world, and a near doubling of the size of the in-world economy. The Standard recently caught up with Kingdon via email to see how the company's enterprise push is faring. The text of the Q&A follows.
The Industry Standard: How is the partnership with Immersive Workspaces going?
Mark Kingdon: Our partnership with Rivers Run Red -- one of our 35 Gold Solution Providers -- first announced about a year ago, is going well. Their Immersive Workspaces product was the first of several comprehensive business solutions developed in Second Life (more here). With very minimal set-up, a company can be holding meetings or hosting virtual events in Second Life. Immersive Workspaces are available both in Second Life and in the standalone behind-the firewall version of Second Life (which is in private beta -- codenamed Nebraska). There are more than 250 Solution Providers globally who are creating customized work and learning experiences for enterprises, government agencies, educational institutions, and non-profits. (For more info on the Gold program, go here)
TIS: By official estimates, we're nearly two years into the recession. How has that impacted enterprise use of Second Life?
Kingdon: The recession -- so difficult for so many -- has been good to Second Life in both our consumer and our enterprise businesses. We've seen enterprise use of the platform grow over the past two years, and today, more than 250 real-world companies -- including a nice cross-section of the Fortune 500 -- use Second Life. Companies like IBM, Northrop Grumman, and Intel use Second Life for 3D collaboration, training, meetings and conferencing, prototyping, simulation, product design and more. The cost saving opportunities are clear and just the beginning of what the virtual world offers. Our standalone version of Second Life, which enterprises can host behind their firewalls, is currently in closed beta. Already, we've seen strong demand for the product -- our closed beta was oversubscribed - and we are looking forward to open beta later this quarter.
TIS: How has the recession impacted profitability (in our last interview in January, you said the company was profitable)?
Kingdon: Linden Lab's balance sheet is strong and our cash balance continues to grow. We're reinvesting our profits to further enhance the Second Life experience. We currently have 330 employees and are actively recruiting for 70 positions over the next 4-6 months, and we're soon to open a new office in Europe (Amsterdam), which will be our ninth globally.
TIS: A company press release recently made a point of comparing the engagement levels found in Second Life and social networks. Do you see SL as a competitor to social networks such as Facebook or LinkedIn?
Kingdon: No, we're not in competition with social networks -- just the opposite. We've created official Second Life outposts on several. You can connect with us at Facebook.com/SecondLife or Twitter.com/SecondLife, for example. And, there's a very active community on Flickr and Plurk. Plus we're working to add social tools that enable Second Life to be more tightly connected to the social networks most popular with our users.
While people are connecting, socializing, and sharing with each other in Second Life, the virtual world is in its essence very different from social networking sites. It's a rich and immersive three-dimensional experience, enables synchronous communication, and has its own vibrant virtual goods marketplace where users will conduct more than $500 million worth of user-to-user transactions this year. Because of its immersive nature, Residents spend an average of about 100 minutes inworld each session,
Comments
These guys are really on to something. I don't think they've even begun to tap the potential of this thing. In the future, when you start your web browser, it will basically be the second life login in screen for your homepage.
Your avatar will be you. It will even know your passwords so you only have to log in once. You'll store your files up there like Mozy. You'll do a search for a product and then teleport to the retailer who will show it to you in 3D art as well as realworld 2D jpegs and even be there to answer questions. You'll network, conference, call the real world, see billboards, go to auctions, and build a 3D location to advertise your company's services or show off examples of what you can do in the real world.
No one's going to catch up to them now. They have the eyeballs, and they've created the base ecosystem which can support a really amazing and productive communication experience.
I am so jealous of the owners...please please please IPO it!!! Please take our money and make it even better!
Basically, Mark, you're gonna need a bigger data center...
Rich
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