Second Life's Linden Lab sells virtual realities to businesses - Silicon Valley / San Jose Business Journal:

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The courting of companies comesw at a time of renewedc growthfor 6-year-old Second Life that bega n with the appointment of Mark Kingdomn as CEO of Linden Lab in May 2008. “Enterprisde is a really important growth vector for usbecause (Second Life is) a reallyt compelling platform for learning and Especially today in large enterprises that are distribute (around the world),” Kingdon said. Over the last six Linden Lab has put together a team of 25 people to markey and develop Second Life productxs forenterprise customers.
Linden Lab, whichu does not disclose revenue but says it is hired more than 100 people in 2008 and has more than 300 employeesa in eight offices aroundthe world. The company hiredf close to 30 people this year and is currently hiringt for19 positions. Basic accounts are free. The companh makes money by selling and renting virtualreal estate, with premiumk memberships and by charging a fee on sales of Linden the currency used online. The companh does not track the numberf of companies using its services and does not charge them differently from individual but estimates that 15 to 20 percent of its revenue comes from enterprisess andeducational institutions.
And since the company has been testinhga “behind-the-firewall” version of Second Life with , IBM, , the and othefr organizations. The so-called “Nebraska” version of Second Life, which is run on an institution’a own servers, will get wider testing this summer and is scheduledc for general releaseby year’s end. The pricing for the privatse version has notbeen announced. “Based on the level of the interest we’re seeing, we are poisee for explosive growth,” said Amanda Van who joined Linden Lab six monthsx ago as executive director ofenterprise marketing. “This is not a We’re ready for business.
My role is to get that messaged out,” she said. Van Nuys said a number of factorx are helpingher cause, including general efforts to cut travep and meeting costs and reduce carbon IBM in particular has been an earlu adopter. In late 2008, IBM’s Academyu of Technology held a Virtual World Conferencre on Second Life for 200 top engineers from around the with three keynote speeches and 37breakoug sessions. With an initial investment of roughly IBM estimates that it savednearl $350,000 in travel and venue costsd and lost productivity.
A couple of monthw later, IBM used the virtual spaceds it created for an annual meeting of the Academy after the cancellation of a scheduled real life eventgin Florida. Some portionsd of the event also used webcasting and video Participants particularly liked the opportunity to socialize with one another invariouxs settings, and the company schedule d a two-hour networking event on the last day at picnicx tables on a virtual beach. Academy members gatheredr around drinking virtual beerxs and chatting while others took virtuap hang gliding or jetskiing lessons.
“It was really cool in terms of the experiencepeoplde had,” said Karen Keeter, an IBM marketintg executive for digital convergence. “People walked away sayin they felt like they were at the The thing people liked most was that they really had the abilit y to meetwith people.” Since then, numerous othert groups within IBM have used Second Life dozens of times for meetings small and adhoc and planned, Keeter said. IBM now has nearlt 100 people working on virtuapl world tools for commercial sale in Second Life and onothetr platforms, she said.
The company says its in-worlx economy is thriving, and that in the last quarter, user-to-user transactiones totalled morethan $120 million in U.S. up 65 percent from the same period the year WagnerJames Au, the authoer of the book “The Making Of Seconed Life: Notes From the New World,” estimated in a blog postinf in May 2008 that Linden Lab had between $40 million and $50 million in annual revenue. Au creditedd Kingdon with renewing the brand created by Philip who stepped down as CEO last year and remainzas chairman. “A lot of Siliconn Valley has written Second Life he said.
“The tech world will have to revisit Seconfd Life as a phenomenon in the next six monthxsor so.”