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3/14/2008
01:09 PM
Mitch Wagner
Mitch Wagner
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Rosedale Out As Second Life CEO

Philip Rosedale, the co-founder of Second Life, is stepping aside as CEO of corporate parent Linden Lab, and the company will begin a search for a CEO with more operational and management experience. This could be great news for Second Life and its community -- the service is, in many ways, brilliant, but it often trips over its feet when trying to execute some of the functions that are basic to any business, like communicating with big customers and processing payments.

Philip Rosedale, the co-founder of Second Life, is stepping aside as CEO of corporate parent Linden Lab, and the company will begin a search for a CEO with more operational and management experience. This could be great news for Second Life and its community -- the service is, in many ways, brilliant, but it often trips over its feet when trying to execute some of the functions that are basic to any business, like communicating with big customers and processing payments.Reuters:

Rosedale will become chairman of the Linden Lab board when his successor is found, replacing Mitch Kapor, who will remain a board member and the company's largest investor. Rosedale said he will also keep a full-time role at the company working on product development and strategy.

"This is my life's work," he told Reuters in an interview. "I'm not going anywhere, and I'm still full-time on this, probably for the rest of my life."

Second Life's growth has slowed after a period of rapid expansion. Rosedale's replacement will face the difficult task of regaining that momentum, working within Linden Lab's idiosyncratic corporate culture, and winning over Second Life's impassioned users.

Professional management would leave the existing Linden Lab leadership and team free to execute at what it's great at -- creating new worlds.

Of course, everything will depend on the quality of the person they hire as CEO. If the person is the wrong fit, the whole company will go down the toilet.

Linden Lab should be doing what Google did when it hired Eric Schmidt and what eBay did when it hired Meg Whitman. They want to find someone who shares in the unique and creative vision of the company, and who also is a veteran of running businesses.

I wrote about these issues in May, in a post where I said Linden Lab needs to hire professional management. Glad to hear I wasn't the only one thinking that.

Reuters has a good overview of the predicament the company finds itself in: They went through a boom in 2006 and early 2007. It was, in many ways, like the dot-com boom of the '90s, fueled by irrational exuberance and a lot of stupid money. But, like the dot-com boom, the fundamental vision was sound. Linden Lab faces the task of recovering its momentum. It had double-digit monthly growth for about a year, with registrations climbing from 2 million accounts at the end of 2006 to 12.8 million users today.

However, the rate of new registrations is slowing, and the number of people who are regular Second Life users has been nearly at about 500,000 to 600,000 for several months now. On the other hand, oddly enough, the peak and average simultaneous user logins are climbing steadily. In other words, while the number of dedicated users is flat, dedicated users are spending more time on average in Second Life. The blog Massively has more analysis.

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