Rumours : Second Life IPO coming soon !

My earlier blog suggested about "The End of Virtual Worlds" just around the corner for majority of the virtual worlds players. And also hinted on what kind of virtual worlds could succeed. There were times when both me and my partner were pitching to our clients on : Client-download virtual worlds VERSUS Flash-based virtual worlds. Always we would cite Second Life, There.com, Vivaty, Metaverse and the others.

Todays biggest news or rumour which could just be true is SECOND LIFE is going for an IPO really soon. Rumour is that it will happens in 2010 or 2011. In the 2009 LA Games Con, Benchmark Capital mentioned that Second Life is doing very well reaping in new revenues thus giving much hope to the virtual world community all over the world.

How is Second Life doing today ?
It seems the mother of virtual worlds ( *Habbo could be the father of virtual worlds as both Habbo and Second Life started in 2000 ) is well alive and secretly growing under the radar. Second Life virtual economy is adapting to the new business model of virtual goods. Last year, in the midst of the recession, Second Life’s virtual goods economy in user-to-user transactions was $567 million, up 65 percent from the year before. San Francisco-based Linden Lab is announcing today that March user-to-user transactions topped $57 million. For the quarter, user-to-user transactions were $160 million, up 30 percent from a year ago. The company’s monthly unique user number peaked in March at 826,000, up 13 percent from a year ago.

Second Life has continued to thrive because it nailed a particular kind of customer: the creative class. These are the artistic people who have fun creating avatars, or virtual characters, goods, and homes inside the virtual world. They put those goods up for sale, making the world more fun and the economy more vibrant. There are people whom quit their real world job to work on a Second Life business full time simply because there is real money involved. There is 250,000 virtual objects a day and are uploaded for sale in Second Life.

The key chance came sometime last year for Second Life, Linden Lab poured more marketing resources ( MONEY ) into attracting new users and making improvements in its user interface ( *a new viewer, which is used to view the world and designed it to make 3D browsing feel more comfortable for new users and to make it easier to find places in Second Life ), which was never user friendly to the mass users. And the most important change element was mimicking what Habbo did by - offering homes to new users. With a single click, a user could move into an incredible Japanese home or a cabin in Lake Tahoe.

Inside Second Life, lots of companies left ghost towns. But about 1,400 businesses remain, and the online voice chat they engage in generates billions of minutes of usage.

According to Mark Kingdon, chief executive of San Francisco-based Linden Lab :

Facebook grows past 400 million –dwarfing the numbers of Second Life — more than half of Linden Lab’s customers report that they are active on Facebook. Hence, Kingdon argues that Second Life is complimentary to other social media, which generates traffic for the virtual world.
Linden Lab has 350 employees, but they aren’t creating virtual goods for the company to sell. Linden Lab leaves that up to its Residents, while most of the company’s employees work as developers or in customer support. The developers are hard at work on ways to connect Second Life to the social Web more explicitly, so that content created in Second Life can flow into other places.

“Our strategy is to bring more of Second Life out to the Web,” Kingdon said. “The distinctions between Second Life and the Web will blur more and more.”

Linden Lab came a long way but learned the hard way, the new formula seems right as its been proven by Habbo and IMVU to be highly lucrative.

NOTES of The Day : Light of hope for virtual worlds companies ? Lessons learned - even the dead can rise ! Users experience is key important and always know where the money mechanics are + monopolise a niche' group that is big enough to grow the business. BUT can ghost towns and good commercial business tactics make an internet virtual world company IPO ? MMO is all about the users and not commercial business deals, so maybe I do have lots of lesson to learn from Second Life afterall.