Social Networking Watch: News on the Social Networking and Social Media Industry

Second Life Makes $100M a Year in Revenue

READ WRITE WEB - Aug 8 - Second Life, the user-generated virtual world, generates ~$100M in revenue a year. A "company insider" says that Linden Lab has grossed ~$75M per year for the past three years and the company is profitable. Linden Lab, the parent company of Second Life, simply charges fees on financial transactions. Its revenue comes from an entirely user-generated economy built on real estate, virtual goods and services. As of Q1 2011, the world was around 2,060 square kilometers in size, which would make it the largest city in the continental United States. Users logged 104M hours in-world last quarter.

by Jon Mitchell
See full article at Read Write Web

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Second Life Chugs Along

THE SOCIAL GRAF - July 29 - Second Life is a great case study in social media trends. And while it's hard to know what the future holds, Second Life does indeed appear to be surviving -- even thriving. From 2M in 2005, the total number of members soared to 18M this year, but only a small fraction of these are active users. Zooming in on active users, the numbers increased from ~25,000 in 2005 to ~700,000 in 2009-2010. Long story short: after five years it's clear that Second Life won't be competing with Facebook, which recently crossed the 500M mark. FULL ARTICLE @ MEDIA POST

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Heavy Layoffs Hit Second Life Parent Company

CNET NEWS - June 10 - Linden Lab, the company that manufactures virtual world Second Life, is going through a "strategic restructuring" that will see ~30% of its employees laid off. The company is combining its engineering and product divisions into a single unit, among a few other structural modifications like an overhaul of Linden Lab's customer service team. Second Life has been a profitable piece of software for some time now. Though it never became the next big Internet sensation the way marketers were predicting three or four years ago, a devoted base of hardcore users have kept it more than afloat and have been making very real purchases of virtual goods. FULL ARTICLE @ CNET NEWS

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Second Life Economy At Record High

READWRITE WEB - Apr 28 - Tom Hall, Chief Product Officer for SL owner Linden Labs, said user-to-user transactions spiked 30% over last year to $160M. Second Life uses a "virtual currency" - Linden Dollar. This is an in-game token currency that must be purchased with legitimate moneys and can be used to buy things inside the environment, or converted back into real-world lucre. The total sales on Xstreet, the Second Life marketplace, reached $2.3M, an 82% increase YOY and a 24% increase over the previous quarter. Total Linden Dollars exchanged on LindeX, the in-game currency exchange, totaled $31M, a 9% increase over the previous year, and monthly unique users with repeat logins peaked in March at 826,214, a 13% increase YOY and an all-time high. FULL ARTICLE @ READWRITE WEB

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Second Life Goes To Work

READ WRITE WEB – Nov 4 – Second Life has rolled out an enterprise solution designed to run behind a corporate firewall. This new version of the service will enable companies to facilitate collaboration and training in a secure 3D virtual environment. The servers are installed in a company's data center and support up to 800 users across eight regions. A Second Life Enterprise marketplace is coming in 2010, with collaborative application integration to follow. FULL ARTICLE @ READ WRITE WEB

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Linden Lab CEO On Second Life's Growth

IDG NEWS - Oct 16 - Linden Lab, the parent company of Second Life, has released figures showing increased usage of the virtual world, and a near doubling of the size of the in-world economy. Here is the interview with Linden Lab CEO Mark Kingdon.

Q: By official estimates, we're nearly two years into the recession. How has that impacted enterprise use of Second Life?
A: The recession has been good to Second Life in both our consumer and our enterprise businesses. We've seen enterprise use of the platform grow over the past two years, and today, more than 250 real-world companies use Second Life. 

Q: How has the recession impacted profitability)?
A: Our cash balance continues to grow. We currently have 330 employees and are actively recruiting for 70 positions over the next 4-6 months, and we're soon to open a new office in Europe (Amsterdam), which will be our ninth globally.

Q: Do you see SL as a competitor to social networks such as Facebook or LinkedIn?
A: No, we're not in competition with social networks -- just the opposite. We're working to add social tools that enable Second Life to be more tightly connected to the social networks most popular with our users.
FULL ARTICLE @ COMPUTERWORLD

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Second Life Claims Social Network Crown

THE INDUSTRY STANDARD - Sep 27 - Second Life Residents spend an average of ~100 minutes inworld per visit. The equivalent of more than $1 billion has been transacted between Residents in Second Life, who purchase virtual goods and services from one another. The inworld economy grew 94% YOY from Q2 2008 to Q2 2009. Now at ~$50M each month in user-to-user transactions, the Second Life economy is on an annual run rate of more than a half billion US dollars, making Second Life the largest virtual economy in the industry. FULL ARTICLE @ PC WORLD

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Second Life Sued For Allowing Sale Of Impostor Virtual Goods

ONLINE MEDIA DAILY - Sep 15 - Linden Research was sued for allegedly hosting a virtual Canal Street on Second Life. Entrepreneur Kevin Alderman, who sells virtual erotic goods in Second Life, said that Linden Lab allows other virtual marketers to offer knock-offs of his "SexGen" beds and other products. Shannon Grei, who sells virtual clothing under the business name "Nomine," also joined in the lawsuit. She alleged that Linden Lab infringes her copyright by allowing other marketers to sell fake versions of her designs. FULL ARTICLE @ MEDIA POST

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Twitter Makes The Noise, Second Life Makes The Money

GUARDIAN.CO.UK -- July 31 -- The consultancy kzero.co.uk reports that membership of virtual worlds grew by 39% in the Q2 '09 to 579M. Almost all of the 39% growth came from children. Facebook and Twitter are lauded to the skies, but neither has found a way to make money – whereas virtual worlds such as World of Warcraft, Entropia Universe, Habbo Hotel, Club Penguin and Second Life are all profitable because their business models are based on the digital elixir of subscriptions and micropayments. FULL ARTICLE @ GUARDIAN.CO.UK

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Virtual Currencies Power Social Networks

CNN -- May 19 -- Currencies that exist only online are becoming a more significant part of commerce on the Web and in the real world. Some, like the hi5 Coin, operate almost like tokens in an arcade or tickets at a fair: They're a stand-in for real-world currency. Other "virtual currencies," like Second Life's Linden Dollars, however, are traded on markets. The currencies also fuel online gaming communities and are becoming an important part of social networks. Edward Castronova, a professor of telecommunications at Indiana University, says people transfer at least $1 billion into the virtual currencies each year, with most of that money going into online games. FULL ARTICLE @ CNN

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Can Second Life Regulate Virtual Sex?

BBC – April 22 – Linden Labs, the firm behind Second Life, is about to enter the world of "regulation". Walking the fine line between making the virtual world more appealing to the mainstream and not alienating its core audience, Second Life is establishing a standalone “continent” for users who wish to engage in the digital blending of pornographic pixels. The company is trying to do more to broaden its mass appeal, which includes limiting untoward activities to the private sector. FULL ARTICLE @ BBC

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A Geek Love Story

NEWSWEEK -- Apr 14 -- Lillie and Hawkins met four years ago in Second Life. Then, before they'd ever seen or heard each other's real voices, they got "married" in Second Life, like 43,000 other couples. The couple has been inseparable ever since. In the real world, there are oceans between them. Lillie lives in California; Hawkins in Wales. In 2007, Lillie got a call from a British television station that wanted to fly her to meet Hawkins as part of a Web documentary about lives on the Internet. She agreed. She arrived at the airport, and spotted Hawkins immediately. They embraced, and their fears about that moment, whether it would be different, quickly faded. Gartner Research has estimated that by 2011, four out of five people online (1.6 billion of 2 billion Internet users) will have experimented with a virtual medium like Second Life. FULL ARTICLE @ NEWSWEEK

Mark Brooks: Virtual worlds are real, and here to stay. :-)  iPart.cn is the Chinese equivalent phenomen where young Chinese meet online, live in their virtual apartments and meet, date and mate online.

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Second Life Can Cause Heart-ache In Real Life

TELEGRAPH.CO.UK -- Nov 14 -- Around 15 million have become "residents" since it was founded in 2003. You can start a new career, own a big house with a pool and, increasingly, fall in love. But while the house and the heels stay in Second Life, the real people behind the avatars carry their heightened emotions back into their first life - sometimes with devastating consequences for their marriage or relationship. FULL ARTICLE @ TELEGRAPH.CO.UK

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This post also appears on OnlinePersonalsWatch.

Second Life Announces Instant Messenger SLim

MASHABLE -- Sep 4 -- Second Life has announced their own instant messenger called SLim™  that will work in the 2D and 3D worlds. Additional features:

- Provides residents with access to their Second Life Friends list with real-time "presence" status updates
- Enables users to seamlessly migrate a text conversation into a voice call
- Allows SLim users to leave voice mails for offline friends
FULL ARTICLE @ MASHABLE

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SmallWorlds Brings A Third Dimension To Web 2.0

TECH CRUNCH -- May 21 -- SmallWorlds, a free browser-based 3D virtual world that integrates YouTube, Flickr, and a number of other Web 2.0 services, will be entering a public beta on June 2. The site is aimed at the teen and adult markets, and is designed to be more casual than Second Life. Users can furnish their rooms with TV sets that feature YouTube videos, posters of Flickr photos, Twitter messageboards, and stereos blasting tunes from Last.fm and SeeqPod. SmallWorlds is also releasing an API that will allow developers to create widgets. FULL ARTICLE @TECH CRUNCH

Ban 'Second Life' In Schools And Libraries

CNET NEWS -- May 7 -- Illinois Republican Mark Kirk says Second Life is a danger zone for children and must be blocked, by law, on school and library computers. Kirk was appalled that Second Life has no age verification features built into its registration process, and he claimed that there are "countless locations" outside of the service's teen-designated area where virtual prostitution, drug deals, and "other wholly inappropriate activities" occur. FULL ARTICLE @ CNET NEWS

How Non-profits Are Using SN To Raise Money

CHICAGO TRIBUNE -- Apr 30 -- Non-profit organizations are testing ways to raise money through social networks. Charities see potential in recruiting young activists who already use online networks to broadcast their identities and make connections. Circle of Health International has its own Facebook page, and 26-year-old Matt Bieber clicked on an application called Causes that allowed him to invite more than 100 of his 200-plus contacts to publicize the non-profit on their profile pages. WaterPartners International, which promotes safe drinking water, created three fictional characters from Ethiopia, India and Honduras and placed them in a virtual village on Second Life to illustrate the challenges of accessing potable water. The avatars also have profiles on MySpace and Facebook. The Humane Society has raised more than $33,000 on Facebook from users who have set up pages to protest everything from puppy mills to seal clubbing in Namibia. The amount of money raised so far is tiny, but we could see online marketing and fundraising slowly displacing direct mail. FULL ARTICLE @ CHICAGO TRIBUNE

 Mark Brooks: Social Networking Watch has $1k in Kiva and $1k in MicroPlace. MicroPlace pays interest and you can sit back and let the money recirculate. Kiva involves user a little more, but doesn't pay interest. No biggie, it's a great cause. We'll be adding more money in and can't recommend these sites enough. 

Helio Update

ARC CHART -- Feb 6 -- Every month, 60 % of Helio subscribers access MySpace via their Helio handsets, averaging nearly 500 page views. Of Helio's subscribers who use the Helio Ocean handset, 57% downloaded the operator's exclusive YouTube application within two weeks of launch. Helio boast a monthly ARPU (Average Revenue Per User) of $85, about 60% greater than Sprint Nextel's, the network which is hosting Helio's MVNO operation. The user-generated content market is one of the most dynamic and rapidly changing sectors in the web economy and companies like MySpace, Facebook and Second Life have grown to become major web brands commanding huge valuations. ARCchart estimates that chat & date is the largest segment in revenue terms, valued at $366 million in 2007, or 52% of the overall mobile UGC market. Total revenues for mobile user-generated content for 2007 are estimated to be just over $700 million and ARCchart forecasts that this will grow to reach $6.6 billion by 2012. FULL ARTICLE @ ARC CHART