Yes, Linden Lab Should Buy Cloud Party (But Likely Won't)
Cloud Party's online entry point is now only here, company CEO Sam Thompson, who I interviewed yesterday, just told me. "Everything should be the same for current users except the old Facebook app links will not work," he says. "For now, we will still require Facebook accounts for authentication, but users will get a full-screen experience and it will be easier to find and share your URL. Facebook features such as photo-sharing and friends lists will still function as before."
Pretty damn cool. It's Facebook-friendly features like these which inspire Botgirl Questi to say "Linden Lab should by Cloud Party". Which is also a pretty cool idea. Because frankly, buying Cloud Party is among the few things that will secure Second Life's future into the next generation. But even then, I think it's unlikely to happen. Here's two reasons why:
Cloud Party undermines Linden Lab's core revenue source: as a web-accessible cloud-deployed virtual world, Cloud Party is a direct attack on SL's main source of revenue: virtual land on a server grid, fully accessible only through a heavy, downloaded client with high hardware requirements. Unless they're already SLers, people who join Cloud Party are highly unlikely to give up that seamless experience -- which is, dare I say, fast, easy, and fun. This means even less people visiting the SL grid -- and even less reason for private region owners to keep paying Linden Lab $300 a month.
Cloud Party undermines Linden Lab's third core revenue source: as Sam told me yesterday, the company plans to introduce a virtual currency-driven Cloud Party marketplace for user-made content with a cash-out option. This will be direct competition to Linden's third most important revenue source: L$ sales and transactions. (And its secondary revenue source, Premium subscriptions, are appealing in great part for their regular L$ allowance.)
All that said, I do see a way Linden Lab could acquire Cloud Party -- buy it now, take it offline for a year or so, retool and re-brand it as a Second Life product (for lack of a better name, Web SL). Yes, SL landowners and content creators will complain that this undermines their business, and they'll be right. But a year from now, if current trends continue, Linden Lab will have lost another 10% in private land, so many more SLers will probably just embrace the inevitable, and upgrade to the Cloud. "SL Classic" will probably continue into perpetuity, albeit with a much smaller userbase, just like Ultima Online or even Active Worlds, and all the other moribund metaverses maintaining micro-userbases, even to this day. And the fundamental SL ideal will live on to the net's next generation, accessible on the web, and the mobile/tablets which will soon dominate.
So I'd say buying Cloud Party would more or less mean the end of Second Life as we know it now. Then again, if Cloud Party continues improving and implementing new features, that will happen anyway, whether Linden Lab owns them or not. The question is whether Linden's executives and board members (one of whom is reportedly leaving soon) are ready to access the large cash reserves they probably have, and make that radical move.