Why Ebay should buy Linden Lab

May 1, 2008

Linden Lab, maker of Second Life, has made huge leaps pioneering the virtual world space. Unfortunately, they haven’t done so well recently. As I like the call them, the Netscape of virtual worlds.

With Phillip Rosedale stepping down, Linden Lab CEO is being replaced by Mark Kingdon. What does this mean for LL? They will probably sell or go public. If they do sell out, there could be many potential buyers (IBM, Google, Microsoft, Sun, etc). However, I think one company that could really benefit from LL is Ebay.

Think about it.

1) Ebay can afford $1-$2bn.

2) What is Ebay good at?

Ebay: exchange of goods for funds

Paypal: exchange of funds

Skype: exchange of conversations

Now, what makes a virtual world like Second Life really tick? The resident-driven virtual economy. For example, $1,812,380 real US dollars were spent in Second Life over the last 24 hours. It’s crazy.

Dollars Spent in Second Life

LindenX Volume

That’s why SL studdered when gambling and banking were banned. With proper regulation and laws like we have in the real world, a virtual economy can thrive and grow.

Gambling Ban

Player-driven virtual economies in Second Life and MMORPGs like World of Warcraft are growing exponentially. If you could monetize the transactions of virtual goods as well as Ebay has monetized the transaction of real life goods, you’ve got yourself a winner.

Ebay: exchange of goods for funds

Paypal: exchange of funds

Skype: exchange of conversations

Second Life: exchange of virtual goods for funds


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2 Responses to “Why Ebay should buy Linden Lab”

  1. Prokofy Neva Says:

    Perhaps you knew that the original e-bay guy, Pierre Omidyar, is on the board of Linden Lab, makers of Second Life? And he/his old board members of ebay didn’t buy out LL all this time.

    To be sure, they added some of their concepts, like they put the ebay auction software script on to the land auction pages of Linden Lab (and made them worse as a result: now you can’t tell who won the auctions, so there is no more public deed office transparency as there used to be ).

    I’m not at all bothered by the idea that “SL is like AOL or Netscape”. That’s a Web 2.0 guri conceit that is rammed down our throats constantly, and is tiresome. Perhaps history won’t repeat. Perhaps in this context, it’s not a bad thing. Walled gardens preserve spaces, value retention, communities. Opensource isn’t a business model for everything. There’s nothing inherently “wrong” about proprietary code, which makes up the Internet (ebay, amazon) just as much as opensource.

    So I don’t feel any need for SL to “transform” as you imagine it must to become “like the Internet” for the “Internet may become like SL,” heavier in places, with downloads into proprietary worlds. Not everything can exist in a flash browser.

    I think ebay, which doesn’t allow the sale of virtual goods on its site anymore, did you know? (now WoW gold, no Linden dollars), is not the buyer.

    Let me think now. It could be IBM, which has a big presence. Or maybe, oh, Wal-Mart? I mean, it could be anything.

    I’ve written about this extensively, and my theory is:

    o Linden will split into two or three entities, a 501-c-3 non-profit educational/charitable institution to receive government and foundation grants; a 501-c-4 to do political action work on the Hill in the industry; a for-profit company that will IPO; various private start-ups or other small service or localization firms that will be in a constellation around it, made up of top residents and former Lindens.

    o The Lindens plan for there to be “one grid” but the rest of the world isn’t waiting for them to make one grid, many other companies are making part of the future Metaverse grid. So the Lindens will scramble and open up parallel grids until they do the various reformats of their company, and have business and education separate from clubs and entertainment and socializing.

  2. mike1144 Says:

    hey
    good post
    and a very good suggestion
    eBay should think about it
    good job keep it up:)


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