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4/18/2007
04:09 PM
Mitch Wagner
Mitch Wagner
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Will Linden Lab's Open-Sourcing Second Life Hurt Some Of Its Biggest Customers?

Currently, Linden Lab's major revenue source is "land sales," leasing space on its servers for businesses and dedicated consumers to build property in Second Life. Many businesses derive revenue by turning around and renting property in-world. When Linden Lab open-sources the servers, land will become more plentiful and the value of land will decrease, thus diminishing the value of these "land barons'" investments.

Currently, Linden Lab's major revenue source is "land sales," leasing space on its servers for businesses and dedicated consumers to build property in Second Life. Many businesses derive revenue by turning around and renting property in-world. When Linden Lab open-sources the servers, land will become more plentiful and the value of land will decrease, thus diminishing the value of these "land barons'" investments.

That's a point raised by "Prokofy Neva," in a response to my earlier post about open-sourcing the Second Life servers. Neva is one of those land barons, and a well-known Second Life gadfly.

Neva says the disclosure in late March that Linden plans to open-source the server software wasn't widely reported because it's old news. Linden Lab's top brass said as much at the World Economic Forun in Davos in February.

Moreover, she says, that's always been their intention. That may be true. Certainly, for all the time that I've been in Second Life, knowledgeable users have been telling me all along that Linden Lab plans to open-source the servers. Still, when I talked to Linden Lab on Feb. 28, they told me the question had not yet been decided.

Linden Lab has never given a timetable or details on when and how Linden Lab plans to open-source the software. She also speculates that Linden Lab's favorite customers and partners -- IBM, for example -- will get access to the code first, prior to it becoming open source. And she describes how Linden Lab has been reducing services over time.

So, when the value of land plummets, how will Linden Lab derive revenue? Maybe by providing trusted services, like managing people's virtual property, said my colleague John Jainschigg, editor-in-chief of Dr. Dobb's Portal, who's up to his neck in Second Life, in a phone discussion earlier today.

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