Firm Profile - Linden Lab

From Information Systems at Pitt Business

Linden Lab　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　Download as a ppt[1]
Based in: San Francisco, CA

Company Mission:

Pioneer an online space which harnesses the power of its users’ creativity to build a digital world as rich and complex as the real world.

1 The Company:
2 Product:
3 Financial Summary:
4 Recent successes and crises:
5 Risk
6 Reference:
7 Career Plan & Research

[edit] The Company:

Linden Lab® is a privately held company established to pioneer a digital space as rich and complex as the real world. Through its first and only product - online service Second Life®, Linden Lab offers a truly collaborative, immersive and open-ended 3-D virtual environment created and inhabited by people from around the globe. According to USA Today (5 February 2007), Linden Lab has about 140 employees of which about 28 are engineers.

Key Employees:

CEO/Founder: Phillip Rosedale

Background:
- Formerly with Accel Partners - Executive in Residence
- Formerly with RealNetworks - Product Marketing (titled CTO)
- Formerly with FreeVue - Founder
- Degree from UC San Diego

CFO: John Zdanowski
John oversees all the financial and accounting activities of Linden Lab including management of the rapidly growing Second Life economy.

Background:
- Formerly with HouseValues - CFO
- Formerly with Affinity Internet - COO
- Formerly with PRTM (Management Consultancy)
- Formerly with GE - Engineer
- Degree from Harvard Business School (MBA) / Degree from Syracuse University (MSEE) / Degree from Clarkson University

Sales/Marketing: Robin Harper, Vice President, Marketing & Community Development
In her initial years at Linden Lab, Robin led the emergence of the Second Life brand, including naming, positioning and the other marketing efforts supporting introduction of this life-changing technology. In the past few years, she shifted focus to the interface between the Second Life Residents and Linden Lab, facilitating communication at all levels and establishing policies, operations and support mechanisms to address issues ranging from social mores to technical support.

Background:
- Formerly with Mondo Media - SVP of Marketing
- Formerly with Maxis - VP of Marketing
- Foote, Cone & Belding (Ad Agency)
- Degree from University of Chicago (MBA)

Technology: Joe Miller, Vice President, Platform & Technology Development; Cory Ondrejka,CTO
Joining the company in April 2006, Joe Miller is responsible for extending the Second Life platform to reliably support very large member communities. He has spent nearly 30 years squarely at the intersection of engaging consumer experiences and interactive technologies, including senior executive positions at Atari, Koala Technologies, Epyx, Convergent, and Sega of America. As CTO, Cory Ondrejka leads the team developing "Second Life," Linden Lab's award-winning, user-created digital world. His team has created the revolutionary technologies required to enable collaborative, atomistic creation, including distributed physical simulation, 3D streaming, completely customizable avatars and real-time, in-world editors. He also spearheaded the decision to allow users to retain the IP rights to their creations and helped craft Linden's virtual real estate policy.

Background:
- (Ondrejka) Formerly with Pacific Coast Power and Light
- (Ondrejka) Formerly with Acclaim
- (Ondrejka) Formerly with National Security Agency (NSA)
- (Ondrejka) Degree from US Naval Academy
- (Miller) [Numerous Positions] notably Atari, SEGA

Business Affairs: Ginsu Yoon, Vice President, Business Affairs
Gene Yoon handles a variety of business matters for Linden Lab, including international market development, corporate and business development, and external developer programs. He was also previously the company's general counsel and provided interim leadership for finance.

Background:
- Formerly with Airespace (acquired by CSCO) - General Counsel
- Formerly with Venture Law Group/Heller Ehrman
- Formerly with KTB Ventures - Principal
- Formerly with Kirkland & Ellis - General Counsel
- Degree from NYU (Law)**Degree from Princeton University

[edit] Product:

The first and only product of Linden Lab called Second Life (abbreviated as SL), an Internet-based virtual world launched in 2003. A downloadable client program called the Second Life Viewer enables its users, called "Residents", to interact with each other through motional avatars, providing an advanced level of a social network service combined with general aspects of a metaverse. Residents can explore, socialize, meet other Residents, participate in individual and group activities, create and trade items (virtual property) and services from one another. Even more, residents can exchange their "Linden Dollars" (L$) to real U.S. dollars. As of October 18, 2007 it is reasonably stable at around L$ 266 to one U.S. dollar.

Original Idea

The original idea to develop Second Life is because the founder: Phillip Rosedale felt that he always “invents” things in his mind but could realize it in the real world. This concept changed when distributed computing and internet spread up. Second Life creates a big distributed simulation that would look like the real world and can be "manipulable" like the real world and that people could collaboratively edit.

Population

Since Second Life launched in 2003, it becomes very popular between player, business and even education organizations. The total population in Second Life until October 15, 2007 is 10 Million and around 14% of Residents are active because they logged-in during last 60 days.

Economy value

Second Life has its own economy and a currency referred to as Linden Dollars (L$). Residents regularly create new goods and services, and buy or sell them in the Second Life virtual world. A Virtual Economy Analyst at the Metastat statistics bureau in Second Life estimated Second Life's 2007 GDP will be between $ 500 million and $ 600 million.

[edit] Financial Summary:

Rounds of Funding: 4
Most Recent Round: USD$19m total capital; 3/06
Prior Round: USD$11m total capital; 10/04
Current Syndicate: 6 Investors
Sources of Revenue:
Account subscriptions ($9.95 a month for premium accounts), usage and service fees, transaction commission fees, game currency sales revenues, game presence auctions, sales and special agreements.
Investors of Note:

Venture Capital: Benchmark Capital; Globespan Capital Partners; Catamount Ventrues
Individuals: Jeff Bezos; Mitch Kapor
Corporate: Omidyar Network
Known Other Equity Holders: Rosedale Phillip, Harper Robin, Miller Joe, Zdanowski John, Yoon Ginsu, Ondrejka Cory, Fleck David, Currier James, Jacobsen Bruce, Yi Gideon, Smith Jed, Laskey Mitch, Lanier Jaron, Traeger Don, Gurley Bill

[edit] Recent successes and crises:

Success:

1. IBM and Linden Lab Launch Collaboration to Further Advance the 3D Internet, 10/10/07 IBM (IBM) and Linden Lab announced the intent to develop new technologies and methodologies based on open standards that will help advance the future of 3D virtual worlds.

2. Linden Lab To Launch '3D Voice' in Second Life Residents of Virtual World Will Enjoy Richer, More Dynamic Communication, including Spatial Awareness Capability. The voice capabilities will enable Second Life Residents to speak to each other if they wish, in addition to the current Instant Messaging and chat functions. Linden Lab anticipates that voice will be particularly valuable to Resident groups such as educators, non-profits and businesses, who might use Second Life as a collaborative tool for learning and training.

3. Creator Anthony Zuiker has decided to build a CSI-branded crime lab in Second Life. This fall, Gary Sinise, the lead on CSI: New York, will chase a killer into virtual worlds. Viewers can then follow the Gary Sinise avatar into Second Life, where they'll help solve the mystery in a virtual Crime Lab. The television conclusion will air sometime in the spring.

Crises:

1. Money Trouble in Second Life - A series of upsets could spell trouble for Second Life's virtual economy. (8/08/2007) Ginko Financial has experienced some challenges in these last couple of weeks. Following the ban on gambling in Second Life we began experiencing a wave of withdrawals from Ginko Financial.

[edit] Risk

Financial Risks:

It requires a lot of IT expanses to maintain the operation of Second Life; since Second Life doesn’t receive respectable revenue from its residents and it rely on funding to support its operation, there might be a financial risk for Second Life.

Legal Risks:

Second Life couldn’t prevent residents violate the copyright holders' rights, and might be take advantage by criminals. Also, there are more other legal risks like: federal and state banking regulations, property rights claims, financial rights claims, pedophilia and child protection related challenges.

Regulatory Risks:

With the strong economy in Second Life, here comes an issue about if those virtual transactions are taxable or not. Especially "Linden Dollars" (L$) can be exchanged to real U.S. dollars, most people think the income from doing transaction in Second Life should be taxable.