Opinion: Acquisition of Xstreet SL and Onrez by Linden Lab
Wednesday, 21 January 2009
A very controversial and hot topic at the moment is the Linden Lab acquisition of Xstreet SL and OnRez. Arguably I think that this manoeuvre by the owners of Second Life could prove to either be on of the best (or worst) things they have done.
Apotheus Silverman the owner of Xstreet SL, along with 8 members of his staff, will be employed directly by Linden Lab to integrate the Xstreet platform into Second Life. On February 11th trading on OnRez (originally developed and maintained by The Electric Sheep Company) will cease and the site will close. All OnRez only merchants are urged to create Xstreet accounts asap to make the changeover as easy as possible.
With approximately 120,000 avatars registered on Xstreet SL (formerly SL Exchange) and an undisclosed (yet considered smaller) number of OnRez users this move affects the majority of Second Life merchants and web shoppers.
All of the preceding information is fact. From here on in, the facts are mixed with my opinion, as a Second Life/ Xstreet SL/ OnRez shopper.
One of the most common complaints about this development is the stronghold monopoly situation that LL now appears to have. I don’t personally subscribe to this opinion, as Linden Lab did not have (until now) any web based merchant system in place. Encompassing the largest sites under their wing is a sound move by Linden Lab, to offer web based shopping (which we know as a popular alternative method to teleporting and visiting shops). Indication stands that OnRez would be closing in February as The Electric Sheep company continues to withdraw it’s prescence in Second Life, therefore for the purposes of the monopoly analysis, OnRez should be therefore discounted. Alternatives are in place for those who don’t want to use the integrated machine that Linden Lab will no doubt build. On the shopping side, smaller popular sites like apez.biz should be able to capitalise on being a truly independent site. Predicting a new ‘all worlds’ merchant site isn’t too far fetched either, considering XStreet SL themselves investigated coverage of other worlds, and one would certainly think if there was a ‘good’ time to launch it, that time would be now. Lastly, the forums on Xstreet have quite an avid following, I would expect them to become a casualty of this buyout since their independence is lost, however sites like SLUniverse should bear witness to a rejuvenation of their forums.
Speculation surrounding Xstreet SL of late has been that the site was troubled. With falling sales and commissions the site was deemed, by many, to be in trouble. Perhaps these rumours had more weight than many of us thought. If Xstreet SL had collapsed it would have caused a cataclysmic wave in the economy of Second Life. If this conjecture is true, Linden Lab may have stepped in to stop this from happening.
Xstreet SL, and OnRez were well known and respected institutions in-world, with good coverage on many sims with terminals, and box hosting sites popping up left, right and centre. One institution with more coverage than these two companies put together has to be of course Linden Lab. Once the initial furore has calmed, providing Linden Lab put the necessary resources behind Xstreet SL, this site with the in-world backup could increase users, items and ease of use immensely.
Talking about ease of use, I perceive the biggest advantage of this development as being the potential to streamline the systems. One problem many ‘high users’ had with this site was the time it took to list items online. With a Linden Lab incorporated Xstreet SL, merchants, may, find selling their items get easier. Currently deliveries depend on the blackbox/dropbox systems, which of course rely on the hosting sims of these boxes being online and responsive. With the potential for streamlining and direct inventory transfers the future of these sales is an interesting and greatly anticipated one. It’s also been cited on the SL Blog, that the potential for sharable wish lists and, I’m sure popular, scheduled deliveries are amongst some of the possibilities for future innovation.
It would be business suicide for merchants listed on these sites to leave, therefore without a mass exodus; everyone will sit back and watch the developments unfold with great interest. One of the biggest areas to watch will be the future of Xstreet’s own Linden Currency Exchange, although Linden Lab promised nothing will happen to this until they watch the intricacies of this system in the coming months, I suspect this will be the biggest casualty of this buyout.
This of course is my personal opinion about this matter, it is based from facts, but the opinions formed are mine. In a world where we all see different angles and perspectives I have invited Peter Stindberg, owner of Babel Translations (Second Life’s premier translation company), co-owner of GREENE Concept sculpt furniture and also the business analyst for ~flirt~ fine jewellery, to give us his take on these events. (A merchant's view: SLX, OnRez and the alternatives)
Labels: 2nd life, Apez, aquisition, linden lab, OnRez, Peter Stindberg, Second Life, secondlife, sl, SLUniverse, slx, web merchant, XStreet SL
In an extended post on my blog, I make three points germane to the current discussion about the acquisition.
1. From the perspective of Linden Lab, this is a good business move, consistent with Mark Kingdon's avowed aim of achieving growth. Acquisition is a normal and common way for a company to grow.
2. Linden Lab is a privately owned business and its primary purpose is to generate revenue for shareholders. With an estimated $360 million (real dollars, not Linden dollars) being traded by SL residents last year, for LL to NOT try to get a slice of that would be stupid: 1% of that added to the bottom line is $3 million, which should pay a few salaries at least.
3. Second Life residents have a huge emotional investment in Second Life, much more than they might have for any other product that they use. They therefore feel as if they have some ownership of LL - but they don't. Tier fees or any other payment are not shares but a fee-for -service. By all means complain about the service, but it is still not ownership. People need to remember that LL is simply a business and you pay for a service.
And it's worth bearing in mind that having both the skills in running a virtual world AND integrating this with the ability to sell product via a web site positions LL nicely as a potential "virtual worlds central bank" in the future. Things that make you go, "mmmh?"
Good move to buy SLX and Onrez I think. I think both sites were in trouble for a variety of reasons. OnRez just didn't have the traffic, and I don't believe SLX was being ran on a professional level. It was ran by regular members of SL who had no affiliation with Linden Labs, but yet could ban people from their private site for any reason. Which they did when they chose. Sometimes those reasons were known to members sometimes they were not. The mods made a lot of things that probably shouldn't have been known public. There were many things that soured the stomachs of people there and I'm glad LL will step in as I also think they noticed a serious problem taking place. I do not however feel that the decisions based on these regular users of SL should dictate whether or not those banned before they were bought should be able to share in this "new" second life service. I was banned for forum behavior that staff members didn't condone. Although their actions in the forums would show that my behavior was quite alright lol. Its a very peculiar case to me when I read that Linden Labs would be taking on some of the sites previous staff as lindens. It kind of lowered my faith in some of the ethical decisions the lab makes. It only takes someone with the ability to read to go back through the forums and not look at its members actions, but the actions of the moderators. It was a forum. To me that has nothing to do with how someones account stands with Linden Labs. Or how good of a merchant they are by any means, if they sell stolen content, or if they are unethical. I think by blatant bad decisions there are many of us left out in the cold based on the personal opinions of regular members of SL... Which I've already mentioned these staff members were before LL bought them up. Very odd to me for LL to honor those decisions.
