Linden Lab Acquires Virtual E-Commerce Sites XStreetSL and OnRez: The Numbers, Strategy, and Controversy
Second Life developer Linden Lab will announce tomorrow that they've purchased two e-commerce services which enable the buying and selling of Second Life content via the Web: XstreetSL, formerly owned by Jay Geeseman (Apotheus Silverman in SL), and OnRez, formerly owned by metaverse developer the Electric Sheep Company. To make an early Web analogy, this is a bit as if Netscape acquired eBay in the late 90s.
Here's the main details, gleaned from a conversation I had earlier today with Tom Hale (T Linden in-world), Linden's new Chief Product Officer: The purchase sum was not disclosed; however, in this acquisition, Geeseman will become a full-time Linden, in which capacity he'll continue to handle SL-based e-commerce. (Eight of his former XStreetSL staffers will work for the Lindens on a part-time basis.) For the near future, at least, XStreetSL will remain a standalone site, though it may be redirected to Second Life's official site later on. OnRez will be subsumed by the Lindens after Feb 11.
Why the acquisition? And will this disgruntle current XStreetSL/onRez users? Hale tried to address those points while explaining the Lindens' strategic thinking, along with offering some very interesting user data:
XStreetSL currently has 600,000 goods for sale, and recently counts 416,000 monthly unique visitors who are very heavily engaged, turning an average of 20 commerce pages per session. (54% are outside the US.) Curiously, though it's backed by the Electric Sheep, which produced CBS's "CSI in SL" and other prominent corporate campaigns, Hale said onRez's usage numbers are much smaller than Geeseman's grassroots operation. From a strategic perspective, the Lindens hope to encourage what they classify as "heavy users" to engage in more Second Life e-commerce, while offering an easy way for lighter SL users to shop on the web, even while not logged in SL. (I.E., from their office over lunch.)
Rumors of this acquisition surfaced in the SL community as far back as last weekend, many worrying that the sale would mean drastic changes to XStreetSL, both for its employees and users. What happens, for example, to all the adult content (attachable genitals, sex animations, etc.) sold on XStreetSL? "Uh, well, that's a great question," Hale told me. He pointed out the site already has an opt-in adult content filter, so consumers can avoid it if they choose. However, he added, "There's always a possibility that it can evolve over time."
I told Hale about reports that some XStreetSL staffers were laid-off as a result of the acquisition (as here, via Radar Masukami) and thus irked. "I'm not privy to all the details," Hale answered, but said, "laid off is kind of a strong word." He said the "vast majority" of XStreetSL staffers would transition to working for the Lindens in some capacity.
Before I got off the phone, I made sure to ask Hale, a very newly minted Linden, if he was familiar with the term "GOM-ing". He chuckled and said he was, sort of. It refers to Gaming Open Market, a very small company which used to operate a third party L$ exchange site-- until 2004, that is, when the Lindens announced the launch of the LindeX. (In broader terms, it refers to Resident-made products and services that are subsequently acquired or made irrelevant by a new Linden service.)
That term may apply to other SL e-commerce sites, but evidently, not to XStreetSL, at least in the negative sense. Jay Geeseman, as Hale put it, "is a very happy man. He's going to do wonders here [at Linden Lab.]"