Second Life scores $11 million in funding

  • By Daniel Terdiman, News.com
  • Posted Mar 28, 2006 10:37 am PT

Metaverse bloats wallet with investors' cash; funding to help push overseas marketing, hire new developers, possible graphical overhaul of virtual world.

From News.com

Linden Lab, the publisher of the popular virtual world Second Life, announced Tuesday an $11 million round of funding led by Globespan Capital Partners.

The new funding, which comes on the heels of an $8 million round in October 2004, came from Globespan as well as Amazon.com founder Jeff Bezos, Lotus founder Mitch Kapor, the Omidyar Network, and Catamount Ventures.

Second Life is one of today's most talked-about virtual worlds, and currently has more than 165,000 users. It is an open-ended "metaverse" that allows anyone to join and participate for free and to create and own any kind of clothing, vehicles, buildings, or other objects at no cost. The company makes its money by charging players user fees for land they buy and build on.

For now, the company isn't profitable, and it's not clear when it will be, said Catherine Smith, Linden Lab's director of marketing. However, she told CNET News.com that Linden Lab plans to use its new funding for aggressive international expansion, as well as for hiring intended to boost its infrastructure.

And while Second Life is on many people's lips at any gathering of video game industry professionals, one thing is clear: It is not always an easy world for new users to get into, and its graphics are not up to the level of competitors like World of Warcraft and There.

Still, virtual world experts are high on Second Life and have mostly been willing to look past its shortcomings because of its members' interesting social behavior.

And, with its new funding, the company may now be able to address the look and feel of Second Life and quiet its critics in this area.

"My guess is they're looking to expand to the next level," said Ron Meiners, an expert in virtual worlds and online games. "They've done some very innovative development thus far, and this means they can both improve their infrastructure and prepare to scale to a higher level of membership."

Even though Second Life is now hovering around 165,000 users, it has been on a growth spurt. Still, its membership pales in comparison with games like Blizzard Entertainment's World of Warcraft, which has around 6 million users, each of whom pays $15 a month to play.

In any case, Smith said Linden Lab's goal is to grow from its current 70 employees to at least 100, and to produce new, German- and Japanese-language versions.

But to Meiners, the real importance of the new funding round is the ability it gives Linden Lab to make Second Life more accessible to more people.

"The complexity of the interface has been confusing for many people coming to Second Life," he said, "so this gives them a chance to consider redesigning for a much larger customer base."

23 Comments

  • LoneHusky

    Posted Jun 13, 2006 12:35 pm PT

    As an SL user I must say I love the program and the game in itself, I do not build much, but i do enjoy spending time socializing and giving free rein to fantasy and fun. and yes has frightening stuff, but also has great stuff in it, want to try it and judge?

    BTW: if you are a minor stick to the teen grid and don't bring your real life drama, we have enough of that in our first life anyway

  • UltimatumCHIEF

    Posted Mar 30, 2006 6:27 pm PT

    WARNING: Second Life has FRIGHTENING CONTENT ! ! ! !
    and One more thing..........this game is a GTA killer. true

  • The_Magical_Man

    Posted Mar 29, 2006 2:29 pm PT

    The place is full of furries anyways

  • Alaris83

    Posted Mar 29, 2006 8:56 am PT

    I'm sure that anyone who has played this game will agree with me that Second Life features some of the most frightening content ever witnessed.

  • ApHoTiK

    Posted Mar 29, 2006 7:47 am PT

    My gf makes 2-300 bucks a month in SL selling her creations, I think its great if you like to create stuff. Oh and if you think you can make money in it easily, your wrong, you have to have some talent first

  • chrisdojo

    Posted Mar 29, 2006 5:15 am PT

    i want $11

  • Carpe_Noctum

    Posted Mar 29, 2006 1:55 am PT

    Only 165,000? You can sign-up for $10 for lifetime access. I was in the beta 3 years ago and I am somewhat suprised this is still around.

  • gatsbythepig

    Posted Mar 28, 2006 7:14 pm PT

    what? are you kidding people are actually paying. I have some beautiful swampland in Florida to sell you.

  • nightshadeA

    Posted Mar 28, 2006 6:02 pm PT

    erm this game is diffrent from the ill fated sims online in what way ?

  • UltimatumCHIEF

    Posted Mar 28, 2006 5:02 pm PT

    Oh God, get a life man....No wait......second life.....Ha ha !
    I know that people Like games But this is too mach.

  • NeoJedi

    Posted Mar 28, 2006 4:56 pm PT

    Hmmm looks like an interesting game... and a social life killer. No thank you.

  • buildar

    Posted Mar 28, 2006 3:16 pm PT

    Donkeljohn yeah that was funny, and yeah those graphic are dated. haha, hope they shape it up. I'm not really an online gamer, but theres lots out there. I wish them the best in developing an interesting world!

  • regulesblade

    Posted Mar 28, 2006 2:10 pm PT

    I hope to see more of this

  • Dantes_Monkey

    Posted Mar 28, 2006 1:00 pm PT

    woah first page, a personal best!

  • Carbopower

    Posted Mar 28, 2006 12:29 pm PT

    Kn0w1: Even though some people in world of warcraft pay between 13 to 15 bucks a month Blizzard still make like a billion dollars a year, only with 6 million suscribers... and you know what? The subscriptions are still going up.

  • KamaKase

    Posted Mar 28, 2006 12:27 pm PT

    Second Life is good fun every once in a while. Go in, build a few things.....play a few games. No different from Halo....and is probably more intellectual.

  • lageasy311

    Posted Mar 28, 2006 11:56 am PT

    I agree silenmoius.....Donkeljohn that was pretty funny hehe

  • DJGeki

    Posted Mar 28, 2006 11:27 am PT

    Donkeljohn: that comment made it worth reading this droll article. thank you for the laugh! And on that note: C'mon GameSpot! If you're going to gank a C|NET article, at least have the decency to paraphrase it. Yes, it's more work, but then again, I pay for your service...don't I? Oh, and Kn0W1: I think they were making a general statement. There's no way that anyone outside of Blizzard will know how many of each different type of paying customer there is on WoW, not to mention those facts are totally irrelevant to the article.

  • CrazyMark3

    Posted Mar 28, 2006 11:17 am PT

    Just a thought, but maybe they can use a simplified XSI tool (Half-Life 2) to help users create their stuff. It would make everything look like it at least came from the 90's

  • silentmobius

    Posted Mar 28, 2006 11:16 am PT

    Donkeljohn, that has to be the funniest thing I've heard all day.

  • kn0w1

    Posted Mar 28, 2006 11:05 am PT

    "World of Warcraft, which has around 6 million users, each of whom pays $15 a month to play."

    uh.. no they don't. People can pay $14 or $13 with 3-month or 6-month subscriptions. You can pay even less than that if you find 60-day timecards on sale for $25 (they are currenlty $28 on amazon = $14/month).
    I also hear that the fee is diff't in other countries.

  • Donkeljohn

    Posted Mar 28, 2006 11:02 am PT

    Now I can capture that international market for my avatar cologne. It is popular because it has the rich, vibrant smell of pixels.

  • henkvn

    Posted Mar 28, 2006 10:48 am PT

    ..there goes the last 5 min of my 24hour day.

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